Sturm, Ruger & Co., the largest publicly traded U.S. firearms maker, fell the most in 15 months after offering promotions that led to profit and sales missing analysts’ estimates.
Third-quarter earnings of 62 cents a share were less than the 70-cent average of analysts’ estimates compiled by Bloomberg. Revenue of $120.9 million also trailed the average projection of $122 million.
“They decided to discount in the months of July and August and that caused gross margins to go down,” Brian Ruttenbur, analyst with BB&T Capital Markets, said in a phone interview. “Normally they discount once a year, which is in the first quarter.”
Ruger offered the discounts, including “something like buy 10 rifles, get one free,” because it doesn’t typically participate in summer distributor shows, Chief Executive Officer Michael Fifer said on a conference call.
Sturm Ruger dropped 9.9 percent, the most since July 2014, to $49.14 at the close in New York. The slump reduced Ruger’s gain this year to 42 percent.