U.S. consumers are rushing to buy guns as the Covid-19 pandemic and protests over police brutality combine with U.S. presidential politics to fuel unprecedented demand.
Firearm background checks compiled by the Federal Bureau of Investigation, a proxy for gun purchases, jumped to a record in June as street demonstrations spread around the U.S. That extended a surge that began in March as the coronavirus prompted lockdowns across the country.
The boom is lifting the shares of gunmakers Smith & Wesson Brands Inc. and Sturm Ruger & Co. after four mostly lean years for investors. Gun shop owners and Wall Street analysts predict new sales gains, especially if protests continue and Democratic presidential challenger Joe Biden, who supports more restrictions on firearms, maintains his lead in national polls over President Donald Trump.
Smith & Wesson and Sturm Ruger have far outpaced broad stock indexes
Gun sales are typically elevated the year people go to the polls to choose a new president, “particularly in the fall as we get closer to the election,” said Peter Keith, an analyst at Piper Sandler. “I think you’ll probably see continued strong demand around the civil unrest and the defund-the-police theme for July and August.”
Keith predicts more share gains for gunmakers, especially given the relative dearth of stocks tied to demand for firearms. Many retailers have scaled back sales following the many mass shootings in the U.S. in recent years.
Smith & Wesson has more than doubled this year to $21.95, rising Wednesday to the highest in almost three years. Sturm Ruger has advanced 62% to the highest since 2016. Sturm Ruger didn’t respond to requests for comment, while Smith & Wesson declined to comment.
Dave Brown, a Dallas media producer, said he made the decision to buy a gun at the end of May after he saw people smashing windows at a restaurant near his apartment. He said the demonstrations lasted until 2:30 a.m. and by noon he was buying a nine-millimeter handgun for $450 plus about $100 in ammunition.
“This is a time where no one knows what’s going to be happening around town the next day, it feels like,’ said Brown, 41. “So a lot of people are uncertain, a lot of them are scared.”
Robert Marcus, owner of Bob’s Gun Shop in Norfolk, Virginia, said sales have tripled since mid-March. He estimated that 35% of purchases are coming from first-time gun buyers, and said his customers are concerned by the coronavirus crisis, protests and potential gun control legislation.
Not all gunmakers are soaring. Remington Arms Co. is preparing to file for Chapter 11 protection for the second time since 2018, the Wall Street Journal reported last week. The company is in talks for a potential bankruptcy sale to the Navajo Nation, the newspaper said, citing people familiar with the matter. There’s no guarantee a deal will be reached.
Remington has faced expensive litigation tied to the Sandy Hook Elementary School shooting in Connecticut in 2012, the Journal said. The company didn’t immediately respond to a request for comment.
Michael Bloomberg, owner of Bloomberg LP, the parent company of Bloomberg News, founded and helps fund Everytown for Gun Safety, a nonprofit that advocates for universal background checks and other gun violence prevention measures.
Gun store owners say sales will continue to rise at least until the presidential election in November. Financial analysts are ratcheting up their revenue estimates for gunmakers after recent quarterly sales gains.
Lake Street Capital Markets projects annual sales of $568 million for Sturm Ruger, up about 25% from the estimate three months ago, according to data compiled by Bloomberg. Smith & Wesson will ring up sales of $825.2 million, a 20% increase from expectations in early March, according to the average of analyst estimates.
James Hillin, owner of Full Armor Firearms in Texas, said the store’s gun sales have increased 75% since January, and that 95% of those were by new gun owners.“They’re scared,” Hillin said before cutting a brief interview short to attend to waiting customers. “They want to protect themselves.”
Subscribe to our YouTube channel: https://bit.ly/2TwO8Gm
QUICKTAKE ON SOCIAL:
Follow QuickTake on Twitter: twitter.com/quicktake
Like QuickTake on Facebook: facebook.com/quicktake
Follow QuickTake on Instagram: instagram.com/quicktake
Subscribe to our newsletter: https://bit.ly/2FJ0oQZ
Email us at firstname.lastname@example.org
QuickTake by Bloomberg is a global news network delivering up-to-the-minute analysis on the biggest news, trends and ideas for a new generation of leaders.
In This Story: 2012
2012 is a film directed by Roland Emmerich and released in 2009. The film depicts a natural disaster in which the Earth’s core heats up, causes unprecedented solar storms and ultimately wipes out most of the world’s population in a major flood.
1 Recent Items: 2012
In This Story: COVID-19
Covid-19 is the official WHO name given to the novel coronavirus which broke out in late 2019 and began to spread in the early months of 2020.
Symptoms of coronavirus
The main symptoms of coronavirus are:
- a persistent new cough (non productive, dry)
- a high temperature (e.g. head feels warm to the touch)
- shortness of breath (if this is abnormal for the individual, or increased)
Latest News about Covid-19
Below are stories from around the globe related to the 2020 outbreak of novel Coronavirus – since the WHO gave the Covid-19 naming. Most recent items are posted nearest the top.
5 Recent Items: COVID-19
In This Story: Donald Trump
Donald John Trump is the 45th and current president of the United States. Before entering politics, he was a businessman and television personality. Trump was born and raised in Queens, a borough of New York City, and received a bachelor’s degree in economics from the Wharton School.
5 Recent Items: Donald Trump
In This Story: Joe Biden
Joe Biden is an American politician who served as the 47th vice president of the United States from 2009 to 2017. A member of the Democratic Party, he served as a United States Senator for Delaware from 1973 to 2009.
Biden is the Democratic presidential nominee for the 2020 election, running against the incumbent, Donald Trump.
On August 11, 2020, Biden announced U.S. Senator Kamala Harris as his running mate in the 2020 presidential election.