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STURM RUGER & CO INC (RGR)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 revenue of $132.5M and adjusted diluted EPS of $0.41; GAAP diluted EPS was $(1.05) due to non-recurring charges tied to inventory write-offs, SKU rationalization, and organizational realignment. Revenue and adjusted EPS exceeded Wall Street consensus, while GAAP EPS and EBITDA were sharply lower because of the charges .
  • Significant one-time items: $17.0M inventory and related asset write-off, $5.7M product rationalization/SKU reduction, and $3.7M organizational realignment; dividend declared at $0.16, ~40% of adjusted net income .
  • New products remained a key driver: $42.2M, or 33.5% of firearm sales, and product lineup repositioned to match market conditions; cash and short-term investments totaled $101.4M with no debt .
  • Strategic capacity expansion: $16M acquisition of Anderson Manufacturing’s facility and equipment in Hebron, KY, paid from cash, to strengthen capabilities and broaden offerings .
  • Near-term stock catalysts: the magnitude and framing of non-GAAP adjustments, strength of new products versus soft industry demand (NICS below pre-2019), and execution on Anderson integration and share gains .

What Went Well and What Went Wrong

What Went Well

  • Strong top-line and adjusted EPS performance versus consensus; management emphasized decisive restructuring to enable long-term growth: “we took decisive steps to position Ruger for long-term success… reorganized our operations… [and] sharpen our focus on future innovation” .
  • New product momentum: $42.2M (33.5% of firearm sales), with demand across RXM pistol, American Gen II rifles, and Marlin lever-action platforms .
  • Balance sheet and capital deployment discipline: $101.4M cash/STI, debt-free, $23.0M returned to shareholders in H1 (dividends + buybacks) .

What Went Wrong

  • GAAP loss and margin compression from restructuring charges: net loss $(17.2)M, net income margin (13.0%), EBITDA margin 1.7% .
  • EBITDA miss versus consensus reflecting charges; while adjusted earnings beat, GAAP profitability was materially impaired this quarter .
  • Industry softness and macro headwinds (tariffs, interest rates, inflation) and adjusted NICS below pre-2019 levels; focus shifts to share gains in a down market .

Financial Results

Income Statement and Margin Comparison (oldest → newest)

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$130.8 $135.7 $132.5
Diluted EPS ($)$0.47 $0.46 $(1.05)
Adjusted Diluted EPS ($)$0.47 —$0.41
EBITDA ($USD Millions, non-GAAP)$14.455 $14.296 $2.254
EBITDA Margin (%)11.1% 10.5% 1.7%
Net Income Margin (%)6.3% 5.7% (13.0%)

Actual vs Wall Street Consensus (Q2 2025)

Values retrieved from S&P Global.

MetricConsensusActualSurprise
Revenue ($USD Millions)117.903*132.491Beat +14.588*
Primary EPS ($)0.38*0.41Beat +0.03*
EBITDA ($USD Millions)12.737*-15.144*Miss -27.881*
Target Price (USD)44.50*44.50*—*
# of EPS Estimates1*——*
# of Revenue Estimates1*——*

Segment/Line Item Breakdown

MetricQ2 2024Q2 2025
Net Firearms Sales ($USD Millions)$129.829 $131.567
Net Castings Sales ($USD Millions)$0.932 $0.924

KPIs and Balance Sheet Highlights

KPIQ1 2025Q2 2025
New Product Sales ($USD Millions; % of firearm sales)$40.7; 31.6% $42.2; 33.5%
Company FG inventory change (units)+17,900 vs prior year +4,000 vs prior year
Distributor FG inventory change (units)−20,100 vs prior year +4,200 vs prior year
Cash + Short-term Investments ($USD Millions)$108.3 $101.4
Current Ratio (x)4.6x 4.0x
Capex ($USD Millions)$1.1 (Q1) $6.7 (H1)
Share Repurchases ($USD Millions; shares)$3.0; 79,200 $16.1; 443,084
Book Value per Share ($)$19.39 $17.82
Cash/STI per Share ($)$6.53 $6.24

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue2025No formal guidance No formal guidance Maintained
Margins2025No formal guidance No formal guidance; Q2 margins impacted by one-time charges Maintained
OpEx2025No formal guidance No formal guidance; organizational realignment completed Maintained
Capex2025May exceed $30M (full-year) H2 capex to increase vs H1, excluding $16M Anderson purchase Raised H2 cadence (qualitative)
DividendQ2 2025$0.18 (Q1) $0.16 (≈40% of adjusted EPS) Lowered

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Product innovationStrong RXM launch, American Gen II, robust new product flow Resilience driven by pipeline; focus on American Gen II, Marlin, RXM New products $42.2M; pipeline “strong”; unified product strategy Sustained strength
Macro/tariffs/interestMargin pressure in 2024 from mix; cautious macro Industry unit declines; inflation/tariffs monitored Soft demand, tariffs/interest/inflation headwinds; NICS below pre-2019 Persistent headwinds
Supply chain/distributionReduced distributor inventories entering 2025 Well-positioned as U.S. manufacturer amid trade issues Aggressive SKU production to meet demand; inventories modestly up YoY Neutral to modest rebuild
Market share strategyBuilding share via disciplined pricing Plan for growth and brand reach “All about market share” in down market; innovation + share gain focus Intensifying
Regulatory/legalBanking caution; FIND Act referenced Not highlightedNo incremental updateStable
R&D executionStrong collaboration with Magpul; platform extensions Robust pipeline and faster speed-to-market Unified product org; emphasis on ideation and lifecycle Improved execution framework

Management Commentary

  • “We took decisive steps to position Ruger for long-term success… reorganized our operations… and brought our entire product strategy under one comprehensive team” — Todd Seyfert .
  • “This $16 million investment… will increase our capacity, strengthen our manufacturing capabilities and broaden our product offerings” — on Anderson acquisition .
  • “Our long-standing practice has been to pay a dividend of approximately 40% of our net income… this quarter’s dividend is approximately 40% of the adjusted diluted earnings of $0.41 per share” — Tom Dineen .
  • “Specific to the firearms industry, we see softening demand with NICS checks falling below pre-2019 levels… Yet our focus remains clear: invest in our culture… expand production capabilities… operate with financial discipline” — Todd Seyfert .

Q&A Highlights

  • SKU rationalization: Focused on American Gen 1, MSR consolidation (Anderson), and EC9 pistols; roughly ~70,000 units fell into rationalization across categories .
  • Pricing/ASP impact: Rationalization lowered ASP; management acknowledged an effect on average sales price per unit during the quarter .
  • Organizational realignment: Completed ~45 days before the call; not a cost-savings initiative but a reallocation of talent aligned to strategy .
  • Marlin roadmap: Write-off primarily related to legacy Model 60 assets; core Marlin lever-action portfolio remains robust with increased production rates and a multi-year pipeline .
  • Demand and share: Ruger outpacing market demand anecdotally; partners’ earnings indicate broader market down ~15–20% while Ruger focuses on innovation and share gains .

Estimates Context

Values retrieved from S&P Global.

  • Revenue: $132.491M actual vs $117.903M consensus — bold beat on sales as new products drove mix and repositioned portfolio pricing.
  • EPS: Adjusted diluted EPS $0.41 vs $0.38 consensus — modest beat; GAAP diluted EPS $(1.05) reflects non-recurring charges (inventory write-offs, SKU reductions, realignment).
  • EBITDA: Consensus $12.737M vs SPGI “actual” $(15.144)M — significant miss driven by one-time charges; press release non-GAAP EBITDA was $2.254M after add-backs .
  • FY trajectory: FY 2025 EPS consensus −$0.16*, FY 2026 EPS 1.92* — analysts likely adjust near-term EBITDA/margin assumptions to reflect restructuring impact and reacceleration tied to new products and Anderson integration.

Key Takeaways for Investors

  • Revenue and adjusted EPS beat, but GAAP loss and EBITDA miss were driven by one-time charges; focus on adjusted run-rate and normalized margins going forward .
  • New products are sustaining top-line resilience and share gains amid soft industry demand; monitor RXM and American Gen II contribution and breadth of the pipeline .
  • Balance sheet strength (no debt, $101.4M cash/STI) supports opportunistic M&A and capacity expansion; Anderson acquisition enhances manufacturing capabilities and product breadth .
  • Dividend policy remains ~40% of earnings; expect variability with adjusted vs GAAP results until charges roll off .
  • Watch H2 capex cadence (higher than H1, excluding Anderson) for signals on pipeline timing and capacity upgrades .
  • Near-term narrative: normalization from restructuring, execution on Anderson ramp, and share gains in a down market; macro (tariffs, rates, NICS) remains a headwind .
  • If consensus models are anchored to normalized (adjusted) EPS, expect limited estimate changes on EPS but downward revisions to GAAP EBITDA/margins near term given the charges; FY 2026 rebuild hinges on product innovation and capacity utilization.*

Values retrieved from S&P Global.*