US Gun Sales Rise Ahead of Control Measures

The US gun sales are rising, just as President Barack Obama unveils control measures designed to limit the availability of weapons.

Smith & Wesson’s shares rose to their highest value since 1999 ahead of Barack Obama’s announcement.

On January 4, Smith & Wesson raised its sales estimate, saying the market was “stronger than originally anticipated”.

The number of background and CRB 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 January 31 it expected sales to be about $175 million-$180 million. Earlier guidance put the likely figure at between $150 million and $155 million.

The gunmaker 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 company said its net profit was $14.2 million for the period, compared with $5.2 million for the same period last year.

In December, Smith & Wesson reported that profits had nearly tripled for the three months to October and net sales have increased 38% over the last five years.

On January 4, the White House unveiled proposals for gun control measures that require more sellers to get licenses 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 finalizing a rule requiring background checks for buyers of dangerous weapons from a trust, corporation or other legal entity.

News of the stronger gun market saw Smith & Wesson’s shares up 11% on January 5, despite stock markets in general falling sharply. Competitor Sturm Ruger’s share rose 7.28% to a 52-week high.