Weak sales and a declining gun market increased the price of ammunition in recent months, and companies are gearing up for another price increase this spring, Bloomberg News reports.
After record sales in 2016, the gun industry is seeing declining purchases, and that downturn is steadily driving up the cost for ammunition.
“Shooting Sports recorded third-quarter sales of $286 million, down 21 percent from $361 million in the prior year quarter, as a result of persistent lower demand in the market for ammunition and firearms,” Vista Outdoor Inc CEO Chris Metz said during an earnings call Thursday.
Vista, which owns dozens of ammunition brands, saw profits decline 47 percent in 2017. The company raised ammunition prices once in January and plans to raise prices modestly in April. It expects competitors to do the same.
Other companies have noticed declining sales, and Remington Outdoor Co., one of America’s oldest gunsmiths, filed for bankruptcy protection Monday in the midst of the slump.
“There is no fear-based buying right now,” James Debney, CEO of American Outdoor Brands Corp., formerly Smith & Wesson, said on a December call with investors. Between 2006 and 2016, gun sales reached several record highs, if one measures sales through the FBI’s National Instant Criminal Background Check System.
ALSO WATCH: Tucker Debates Gun Control
The gun market sees explosive growth when gun control advocates have a political majority in the government, and with Republican dominance in both Congress and the White House, the market has leveled off.
The price increase for ammunition likely won’t slow the industry greatly. “We’re fortunate that we have extremely close relationships with our customers,” Metz said. “We are putting forward price increases that we think are realistic and, so far, what we’ve seen from buying behavior is no real changes.”
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