Amid Booming Gun And Ammo Sales, Arms Makers Aim Not To Get Burned Again

By Aaron Smith @ Forbes.com, Aug. 18 Aaron Smith Contributor Aerospace & Defense I'm a seasoned reporter who covers the firearms industry

Gun and ammo makers are staying cautious ahead of the election despite surging sales, because they remember all too well the crash that happened after the election of President Trump.

Gunmakers can barely keep up with demand. Sales have been booming since the start of the pandemic, fueled by fears of coronavirus and civil unrest. FBI background checks have been breaking records. Makers of guns and ammo are reporting double-digit increases in revenue. Handguns are flying off the shelves and ammo is selling out and getting scarce.

“It’s the 2013 shortage all over again,” said Brian Rafn, a gun industry analyst who recently retired from Morgan Dempsey, referring to the run on ammo during the Obama administration. Rafn, whose family owns shares in Sturm, Ruger, said that nowadays buyers of popular ammo like 9 mm have to hunt for it from store to store like “the guy who’s buying milk during the hurricane.”

But gun and ammo makers are hyper-cautious about ramping up manufacturing capacity. They don't want to get burned like in 2016, when sales surged to record levels only to implode on Election Day. Sales then were driven by fears of gun control fueled by mass shootings, but those fears evaporated with the election of President Trump, a Republican endorsed by the National Rifle Association. Gun sales plunged immediately after his election, resulting in layoffs and sliding stocks for Sturm, Ruger and Smith & Wesson.

Gun makers fear that fickle consumers could slow down spending, depending on election results, the severity of the pandemic, or the persistence of clashes between police and protesters [....]