Gun sales rise in US as Obama unveils control plans
January 8, 2016 ·
Sales of guns in the US are rising, just as President Barack Obama unveils control measures designed to limit the availability of weapons.
Shares in gunmaker Smith & Wesson rose to their highest value since 1999 ahead of the President’s announcement.
On Monday, Smith & Wesson raised its sales estimate, saying the market was “stronger than originally anticipated”.
The number of background checks on potential buyers – a guide to future sales – has also risen.
The National Instant Criminal Background Check System said that checks were up by about 38% last month compared with December 2014.
Smith & Wesson’s trading update said that for the three months ending 31 January it expected sales to be about $175m-$180m. Earlier guidance put the likely figure at between $150m and $155m.
The company said that “the sell-through rate of its products at distribution has been stronger than originally anticipated, resulting in reduced distributor inventories of its firearms”. That means guns are being bought faster than Smith & Wesson is supplying them.
The firm said its net profit was $14.2m (£9.46m) for the period, compared with $5.2m for the same period last year.
In December, the company reported that profits had nearly tripled for the three months to October and net sales have increased 38% over the last five years.
On Monday, the White House unveiled proposals for gun control measures that require more sellers to get licences and more gun buyers to undergo background checks.
The US Bureau of Alcohol, Tobacco, Firearms and Explosives will require that people who sell guns at stores, at gun shows or over the internet be licensed and conduct checks,
The bureau is also finalising a rule requiring background checks for buyers of dangerous weapons from a trust, corporation or other legal entity. President Obama is due to disclose further details about the plans on Tuesday.
The president has said he will curb gun violence and unregulated sales after a series of mass shootings, which included last month’s attack in San Bernardino, California, that killed 14 people.
James Hardiman, an analyst at Wedbush Securities, said the increase in gun sales was probably due to buyers fearing tougher controls.
News of the stronger gun market saw Smith & Wesson’s shares up 11% on Tuesday, despite stock markets in general falling sharply. Competitor Sturm Ruger’s share rose 7.28% to a 52-week high.
