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STURM RUGER & CO INC (RGR)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue modestly grew year over year to $126.8M (+3.7% YoY) and rose sequentially from Q2’s $132.5M to $126.8M, but GAAP diluted EPS fell to $0.10, aided by a $0.19 per-share benefit from a tax-rate revision; absent that benefit, EPS would have been a $(0.09) loss .
  • Mixed scorecard versus S&P Global consensus: revenue beat ($126.8M vs $124.2M*) while EPS missed materially ($0.10 vs $0.355*) as costs tied to the new Hebron, KY facility and promotions weighed on margins; pre-tax loss was $2.1M .
  • Non-GAAP profitability metrics deteriorated: EBITDA was $2.9M (2.2% margin) vs $9.9M (8.1%) in Q3’24, reflecting increased material/technology and promotional costs and ~$1.9M of Hebron acquisition/operating costs without offsetting revenue .
  • Strategic execution advanced: new products generated $40.6M (33.7% of firearm sales), Glenfield brand launched, RXM and Ruger American Rifle Gen II expanded, and Hebron ramp remains on track to begin firearms production by year-end, positioning for future growth and cost control .
  • Corporate/stock dynamic: Board adopted a limited-duration stockholder rights plan after Beretta disclosed a 9.0% stake, providing a governance backdrop that could influence sentiment and strategic optionality near term .

Note: Items marked with an asterisk (*) are values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • New product vitality and share gains: “new products” contributed $40.6M, or 33.7% of firearm sales, led by RXM pistol, Marlin lever-action, and Ruger American Rifle Gen II; management cited growing market share despite a soft industry backdrop .
  • Strategic footprint and insourcing: acquisition of Anderson’s Hebron facility supports modern sporting rifle capacity and insourcing of components to improve costs, lead times, and quality; production is targeted by year-end .
  • Liquidity and capital returns: $80.8M of cash and short-term investments, zero debt, YTD cash from operations of $38.8M; returned $35.6M to shareholders YTD via dividends ($9.5M) and buybacks ($26.1M at $35.60/share) .

What Went Wrong

  • Profitability pressure: GAAP operating loss of $(3.5)M and pre-tax loss of $(2.1)M; GAAP diluted EPS just $0.10, with a $0.19 per-share tax benefit masking an underlying $(0.09) loss, reflecting Hebron start-up costs, material/technology costs, and higher promotions .
  • Margin compression: EBITDA fell to $2.9M (2.2% margin) vs $9.9M (8.1%) in Q3’24 amid increased sales promotional expenses and ramp costs; Q2 had also been pressured by non-recurring rationalization and realignment actions .
  • Pricing/mix headwinds: management highlighted heavy LCP promotional activity and mix as notable drivers of lower ASPs and margin headwinds in the quarter .

Financial Results

Headline P&L vs Prior Periods and Consensus

MetricQ3 2024Q2 2025Q3 2025 (Actual)Q3 2025 (Consensus)
Revenue ($USD)$122.287M $132.491M $126.766M $124.218M*
Operating Income ($USD)$3.742M $(20.716)M $(3.484)M n/a
Net Income ($USD)$4.738M $(17.226)M $1.582M n/a
Diluted EPS ($)$0.28 $(1.05) $0.10 $0.355*
EBITDA ($USD)$9.938M $2.254M $2.851M n/a
EBITDA Margin (%)8.1% 1.7% 2.2% n/a

Note: Items marked with an asterisk (*) are values retrieved from S&P Global.

Key deltas:

  • Revenue: +3.7% YoY; sequential decline vs Q2; beat consensus by ~$2.5M (driven by new products and share gains) .
  • EPS: miss vs consensus, with GAAP EPS $0.10 vs $0.355*; absent a tax-rate revision, EPS would have been $(0.09) .

Segment/Line-of-Business Sales

MetricQ3 2024Q2 2025Q3 2025
Net Firearms Sales ($USD)$121.512M $131.567M $126.130M
Net Castings Sales ($USD)$0.775M $0.924M $0.636M

KPIs and Operating Measures

KPIQ1 2025Q2 2025Q3 2025
“New Products” Sales ($ / % of firearm sales)$40.7M / 31.6% $42.2M / 33.5% $40.6M / 33.7%
Cash + Short-term Investments (quarter-end)$108.3M $101.4M $80.8M
Cash from Operations (YTD)$11.1M $25.9M $38.8M
Capital Expenditures (YTD)$1.1M $6.7M $27.6M (incl. $15.0M Anderson)
Share Repurchases (YTD)$3.0M $16.1M $26.1M (730,665 shrs @ $35.60)
Quarterly Dividend per Share$0.18 $0.16 $0.04 (declared for Q3)
Inventory Changes (units)n/aCo. +4,000; Dist. +4,200 vs Q2’24 Co. −15,500; Dist. +4,100 vs Q3’24

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue/EPSOngoingNo formal guidance provided No formal guidance provided Maintained no guidance
CapexFY 2025“May exceed $30M” (Q1) “Expects $35M for the year” (Q3) Raised
Dividend PolicyOngoing~40% of net income (variable per quarter) ~40% of net income; Q3 dividend $0.04/sh Maintained policy; per-share lower on lower earnings
Tax RateFY 2025Not specifiedAnnual ETR revised; recognized $3.0M increase to YTD tax benefit in Q3 Revised (benefit to EPS)
Hebron ProductionNear-termn/aOn pace to begin firearms production by year-end New operational milestone
Rights Plan (Governance)2025–2026n/aAdopted limited-duration stockholder rights plan (10% trigger) New governance measure

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 and Q1)Current Period (Q3)Trend
Market demand/NICSQ1: Retail unit sales −9.6% YoY; adj. NICS −4.2%; Ruger held sales and stayed profitable . Q2: NICS below pre-2019; macro headwinds (tariffs, rates, jobs, inflation) .NICS down ~4% YTD; used firearm availability pressuring retail; Ruger achieved YoY sales growth .Demand soft; Ruger outperforms peers.
Manufacturing footprint (Hebron)Q2: Acquired Anderson assets; capacity expansion and insourcing planned .~$1.4M quarter costs without revenue; on pace for production by year-end .Ramp in progress; near-term cost drag.
Product innovationQ1: Pipeline strength; RXM, Marlin, Ruger American Gen II . Q2: New products 34% of firearm sales .New products 34% of firearm sales; launch of Glenfield; expanded Ruger American Gen II; Marlin 10mm; more RXM variants ahead; Red Label shotgun returning .Accelerating cadence.
Pricing/mix & promotionsQ2: SKU rationalization and price repositioning .Heavy LCP promotions/mix drove ASP pressure .Promotional intensity elevated.
Tariffs/supply chainQ1: U.S.-made footprint mitigates some tariff risks . Q2: Macro tariff uncertainty noted .Aluminum tariff “noise”; positioning to react; limited impact to date .Monitored; manageable so far.
Regulatory/legal & shareholdern/a in Q1/Q2Rights plan adopted in response to Beretta’s 9.0% stake; Board open to dialogue .New governance dynamic.

Management Commentary

  • “This quarter’s results reflect both the realities of a challenging macro environment and the actions we are taking to position Ruger for long-term growth… stronger topline performance, encouraging new product announcements and growing market share… focus on improving our profitability by addressing our cost-structure.” — Todd Seyfert, CEO .
  • “On a pre-tax basis, the company lost $2.1 million… driven by $1.9 million of acquisition and operating costs at [Hebron], increased costs associated with material and technology, and increased sales promotional expenses… revis[ing] our estimated annual effective income tax rate… increased third-quarter net income by $0.19 per share… without this increase, EPS would have been a loss of $0.09.” — Tom Dineen, CFO .
  • “With the additional resources in Hebron, we are actively working to insource components… improve our cost structure, shorten lead times, and give us greater control over quality and delivery.” — CEO .
  • “The coming months will bring… building out the RXM pistol family… launching a new line of modern sporting rifles manufactured in our Hebron facility, and bringing back the classic Ruger Red Label Shotgun.” — CEO .

Q&A Highlights

  • Margin drivers: Management cited ~$1.4M in Hebron costs without revenue and continued promotions as the primary drivers of gross margin pressure, less so the Q2 restructuring actions .
  • Hebron ramp: “Our goal was to be in production with firearms by year-end, and we’re on pace for that target” .
  • Mix and pricing: Heavy LCP promotional activity and mix drove lower ASPs; Glenfield is targeted as the entry price point in a “good-better-best” brand stack (Glenfield–Ruger–Marlin) to expand the addressable market without cannibalizing higher tiers .
  • Input costs/tariffs: Input prices largely “fairly flat”; some “noise around aluminum” with tariff uncertainty, monitored closely; limited impact to date .
  • Shareholder/strategic backdrop: On Beretta’s stake, company adopted a rights plan to preserve the status quo and enable engagement; management reiterated openness to discussions that create lasting value .

Estimates Context

  • Revenue beat: $126.766M actual vs $124.218M consensus* (beat of ~$2.5M) .
  • EPS miss: $0.10 GAAP diluted EPS vs $0.355 consensus*; note third-quarter EPS included a $0.19 per-share benefit from the ETR revision; ex-benefit, EPS would have been $(0.09) .
  • Implications: Consensus may move up on revenue (new products), but EPS likely adjusts down near-term to reflect continued ramp costs and promotional intensity; Hebron insourcing benefits are more back-half weighted once production yields and volumes normalize .

Note: Items marked with an asterisk (*) are values retrieved from S&P Global.

Financial Details (from Q3 8-K/Press Release)

  • P&L bridge: Operating loss $(3.5)M; other income $1.37M; pre-tax loss $(2.1)M; tax benefit $3.7M; net income $1.6M .
  • EBITDA and margins: EBITDA $2.9M; EBITDA margin 2.2% (vs 8.1% in Q3’24) .
  • Balance sheet/cash: Cash & ST investments $80.8M; current ratio 3.5:1; no debt .
  • Capital returns: Q3 dividend declared $0.04/share (~40% of net income); YTD repurchases $26.1M (730,665 shares at $35.60) .

Key Takeaways for Investors

  • Mixed print: Revenue beat on resilient demand for new products, but EPS miss driven by ramp costs and promotions; absent tax-rate revision, underlying EPS would have been a loss .
  • Near-term margin pressure vs medium-term cost thesis: Hebron start-up (~$1.9M in Q3) and promotions weigh now, but insourcing and capacity should improve unit economics as production commences by year-end .
  • Innovation-led share gains: New products consistently ~1/3 of firearm sales; continued platform expansions (RXM, Ruger American Gen II, Marlin) and Glenfield brand broaden price ladder and TAM .
  • Clean balance sheet and disciplined capital returns: $80.8M of cash, no debt, and variable dividend policy (~40% of earnings) plus opportunistic buybacks provide flexibility through the cycle .
  • Governance overhang/opportunity: Rights plan adoption in response to Beretta’s 9% stake frames potential strategic engagement scenarios; management open to value-creating dialogue .
  • Estimate revisions: Expect downward EPS revisions near term until cost leverage materializes; revenue estimates could be biased slightly higher given beat and pipeline strength (S&P Global-based consensus) .
  • Execution watch items for next quarter: Hebron production timing and ramp, promotional cadence normalization, aluminum/tariff impacts, and product launch sell-through metrics .

Appendices

Additional Operating/Quarterly Details

  • Other observations from Q3 release: Company finished goods −15,500 units YoY vs Q3’24; distributors’ finished goods +4,100 units YoY; 9M’25 cash from operations $38.8M; 9M’25 capex $27.6M (incl. $15.0M Hebron) .
  • Q2 context (for trend): Q2 revenue $132.5M; GAAP diluted loss $(1.05); adjusted EPS $0.41; non-recurring actions: $17.0M inventory/asset write-off, $5.7M SKU reduction, $3.7M realignment; capex 1H’25 $6.7M .
  • Q1 baseline: Q1 revenue $135.7M; diluted EPS $0.46; cash & ST investments $108.3M; capex $1.1M .

Citations

  • Q3 2025 8-K/Ex.99.1:
  • Q3 2025 press release:
  • Q3 2025 earnings call transcript:
  • Q2 2025 press release:
  • Q2 2025 earnings call transcript:
  • Q1 2025 8-K/Ex.99.1:
  • Rights plan press release:

Note: Items marked with an asterisk (*) are values retrieved from S&P Global.