Sturm Ruger Falls After Gunmaker Surprises With CEO Successionby
Fifer to retire in May after 10 years as chief executive
Retirement ‘caught the market a little by surprise’: investor
Sturm, Ruger & Co. declined the most in two months after unexpectedly announcing that Chief Executive Office Michael Fifer will retire in May and be replaced by Chief Operating Officer Christopher Killoy.
The gunmaker hadn’t given any indication that Fifer, who was 58 as of a Feb. 24 corporate filing, was planning to step down during its May 3 annual meeting. The announcement came after the market closed Tuesday when the company announced second-quarter earnings.
“The succession plan caught the market a little by surprise,” said Brian Rafn, lead portfolio manager at Morgan Dempsey Capital Management and a Sturm Ruger investor for more than two decades. “If Mike Fifer would have come out and said, ’We are doing a three- or four-year plan,’ then it would be a non-event,” Rafn said.
Killoy, who is 57 according to the filing, is a graduate of the U.S. Military Academy at West Point. He worked at General Electric Co. and rival gunmaker Smith & Wesson Holding Corp. before joining Ruger as executive director of sales in 2003. He became president and COO of the Southport, Connecticut-based manufacturer in 2014 and will be the fourth CEO in Ruger’s 67-year history.
In the decade that Fifer has led the company sales increased almost fourfold, to $614.3 million in the 12 months ended June. Its market value has jumped sevenfold to $1.3 billion, according to data compiled by Bloomberg.
Sturm Ruger fell 4.8 percent to $66 at 3:07 p.m. The shares earlier declined as much as 6.7 percent, the biggest intraday drop since June 6. The stock had gained 16 percent this year through Tuesday.
Second-quarter earnings rose to $1.22 a share from 91 cents a year before, the company said. Revenue surged 19 percent to $167.9 million.
Sturm Ruger also announced that it will match donations to the National Rifle Association’s Institute for Legislative Action group up to a total of $5 million between now and the November elections. It also is extending a pledge to donate $2 to the NRA for every firearm sold through the elections, the company said on an earnings conference call Wednesday.
Presidential hopeful Hillary Clinton and her “campaigning against the lawful commerce in arms” may be having an effect on the gunmaker, Fifer said on the call, without providing specifics. “It will be hard for any of us to believe that didn’t have some impact, but it can’t be measured,” he said.