STURM RUGER & CO INC (RGR)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 net sales were $135.7M with diluted EPS of $0.46; sales were essentially flat year-over-year ($136.8M in Q1 2024) while EPS improved versus $0.40 last year . Gross margin increased from 21.5% to 22% year-over-year, driven by fixed-cost leverage from higher production despite $0.8M of deferred revenue tied to promotions .
• Results missed S&P Global consensus: revenue $148.0M* and EPS $0.65* versus actual $135.7M and $0.46, respectively; coverage is limited (one estimate), magnifying apparent miss severity (see Estimates Context) (Values retrieved from S&P Global).
• Management sharply raised 2025 capex plans to “may exceed $30M” from prior ~$20M, to accelerate new product introductions, expand capacity, and upgrade manufacturing .
• Balance sheet remains a core strength: $108.3M cash and short-term investments, current ratio 4.6x, and no debt; shareholder returns included a $0.18 dividend and $3.0M buybacks (79,200 shares at $37.74) .
• Stock reaction catalysts: execution on RXM pistol platform and broader pipeline, capex acceleration signaling share-take ambitions in a soft market, plus management commentary that U.S. manufacturing and raw-material positioning temper near-term tariff risks .

What Went Well and What Went Wrong

What Went Well

• Margin resilience and operational discipline: “gross margin increased from 21.5% to 22%,” supported by fixed-cost leverage amid higher production despite promotional deferrals .
• New product momentum: New product sales were $40.7M, 31.6% of firearm sales, led by RXM pistol, Ruger American Rifle Gen II, and Marlin lever-action rifles . CEO: “Although the firearms industry may be cyclical, Ruger does not have to be… our performance this quarter supports that.”
• Strong balance sheet and shareholder returns: $108.3M cash/short-term investments, current ratio 4.6x, no debt; $4.0M dividends and $3.0M buybacks in Q1 .

What Went Wrong

• Headwinds and top-line softness versus consensus: RetailBI indicates retail firearm unit sales -9.6% YoY, revenue -11.5% YoY; adjusted NICS -4.2% YoY . Actual revenue and EPS missed consensus (see Estimates Context) (Values retrieved from S&P Global).
• Sequential deceleration vs Q4 2024 on revenue ($145.8M vs $135.7M) and EPS ($0.62 vs $0.46), reflecting a promotion-rich environment and broader demand pressure .
• Promotional activity and ASP dynamics: RXM ramping affected ASP near term as lines stabilized, with management indicating pricing/ASP impacts during early scale-up .

Financial Results

Segment and sales mix

Balance sheet and cash flow KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO Todd Seyfert: “Although the firearms industry may be cyclical, Ruger does not have to be, and our performance this quarter supports that.”
• CEO Todd Seyfert: “We are uniquely positioned to navigate global trade disruptions… American-made products insulate us… though we are monitoring areas where these costs may still have an effect.”
• CFO Thomas Dineen: “Gross margin increased from 21.5% to 22%. The higher margin was driven by favorable leveraging of fixed costs… despite $800,000 of deferred revenue related to sales promotions.”
• CEO Todd Seyfert on growth plan: “We will be more aggressive in terms of the pace of [new product] launches… and pace those launches with the appropriate capital to get them to the market faster.”
• CEO Todd Seyfert on tariffs: “We’re not seeing much [impact] in the immediate future… we’ve gone a little bit higher with raw materials to make sure that we’re covered in the short term.”

Q&A Highlights

• Capex acceleration and product cadence: Management expects a faster pace of launches and is aligning capacity investments to shorten time-to-market .
• Sales/marketing investment pacing: Near term investments skew to capital; expense ramp to be paced with introductions over time .
• RXM platform impact: Early ramp affected ASP; steady-state output expected to normalize . Platform offers accessory ecosystem expansion with Magpul collaboration .
• Tariffs/inflation: U.S.-sourced components and raw-material positioning mitigate near-term tariff risks; close monitoring continues .
• Confidence to expand capacity in a soft market: Strong balance sheet enables aggressive investment to take share where competitors may be constrained .

Estimates Context

• Q1 2025 variance vs consensus: Revenue -$12.3M* and EPS -$0.19*; coverage is limited (one estimate), which can exaggerate miss optics (Values retrieved from S&P Global).

Key Takeaways for Investors

• Ruger demonstrated margin resilience in a weak retail firearm market, leveraging fixed costs and production to expand gross margin despite promotional headwinds .
• Q1 missed limited-consensus revenue/EPS, but new product momentum (RXM, American Rifle Gen II, Marlin) and platform strategies support medium-term growth (Values retrieved from S&P Global).
• Management raised 2025 capex to “may exceed $30M,” signaling intent to accelerate launches, expand capacity, and pursue share gains while competitors may be restrained .
• Balance sheet strength (no debt, $108.3M cash/ST investments, 4.6x current ratio) enables offensive investment and continued shareholder returns (dividends and buybacks) .
• Near-term tariff risk appears manageable given U.S. manufacturing and raw-material positioning; management is actively monitoring supply chain tails .
• Watch for execution on RXM platform and accessory ecosystem, plus collaborations (Magpul, Dead Air) that can deepen customer engagement and ASPs .
• Trading lens: Near-term sentiment likely driven by consensus misses and macro-demand data, but capex signal plus product pipeline could catalyze narrative shift if sequential sell-through and mix improve.

* Values retrieved from S&P Global 

Citations: Press release and 8-K Q1 2025: Earnings call Q1 2025: Other press release Q1 2025: Prior quarters: Q4 2024 8-K/press release ; Q3 2024 8-K/press release