Sturm, Ruger & Company (RGR) Q3 2026 Earnings Call Transcript

DATE

Wed, Nov. 4, 2026

CALL PARTICIPANTS

• President and Chief Executive Officer - Todd W. Seyfert
• General Counsel - Sarah F. Colbert
• Chief Financial Officer - Andrew Wieland

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TAKEAWAYS

• Net Sales -- $147.6 million, an increase of 16.5% compared to the $126.8 million reported in the third quarter of 2025.
• Net Income -- $5.8 million, representing a 266.9% increase from the $1.6 million achieved in the prior year period.
• Diluted EPS -- $0.36, a 260% increase over the $0.10 per share reported in the third quarter of 2025.
• Adjusted EPS -- $0.44, excluding certain non-recurring costs, compared to $0.10 per share in the prior year.
• Adjusted EBITDA -- $14.3 million, up 401.9% year over year from $2.9 million.
• Adjusted EBITDA Margin -- 9.7%, an improvement from 2.2% in the third quarter of 2025 driven by favorable product mix and manufacturing efficiencies.
• Average Selling Price -- approximately $377, which remained strong both year over year and sequentially.
• Gross Margin -- 20.7%, up from 15.1% in the prior year period due to improved cost control and operational execution.
• Year-to-Date Net Sales -- $447 million, reflecting 13% growth over the first nine months of 2025.
• Portfolio Suspension -- $25 million in annual revenues, representing products with minimal to no profitability that account for roughly 4% of total unit production.
• Cash and Short-term Investments -- $101.4 million as of Sept. 26, 2026, providing the company with significant financial flexibility.
• Current Ratio -- 3-to-1, with the company reporting that it maintains zero debt on its balance sheet.
• Capital Expenditures -- $8.9 million for the first nine months of the year, with full-year guidance of approximately $30 million.
• Dividends -- $0.18 per share for the quarter, which equates to approximately 40% of adjusted net income.
• Cash Flow from Operations -- $24.2 million for the first nine months of 2026.
• Shareholder Returns -- $6.4 million returned through quarterly dividends during the first nine months of the year.
• Distributor Inventory -- healthy levels according to management, who reported comfort with sell-through and retail positioning heading into the fourth quarter.
• Manufacturing Modernization -- ongoing efforts to align factory capacity more closely with demand and increase output on high-demand product lines.

SUMMARY

Sturm, Ruger & Company, Inc. (NYSE:RGR) reported substantial year-over-year increases in revenue and profitability for the third quarter, supported by a significant expansion in gross and adjusted EBITDA margins. Management attributed the improved financial performance to disciplined cost management, a more favorable product mix, and the successful execution of manufacturing efficiencies. The company is currently implementing its Ruger 2030 strategy, which focuses on modernizing manufacturing operations and leveraging a newly installed enterprise resource planning platform to improve business visibility. Additionally, the company initiated a portfolio rationalization process to reallocate capital and manufacturing resources toward products and markets with the highest demand and growth potential.

• Management completed the implementation of the Oracle Enterprise platform, which provides the technology foundation required for improved business visibility and process integration.
• The company established the Ruger Business System to provide operating discipline for planning, executing, and measuring performance across all manufacturing facilities.
• CEO Seyfert stated, "We are becoming more disciplined about where we compete, more flexible in how we manufacture, and more focused on bringing compelling products to market."
• The company anticipates introducing numerous new models in the coming months to support a pipeline that reflects broad product development and marketing efforts.
• Management clarified that the suspension of low-profitability product families enables the company to create capacity for products where Ruger can achieve quality leadership and growth.
• CFO Wieland noted that the company's strong balance sheet allows for continued investment in facility infrastructure and upgraded manufacturing capabilities.
• Management reported that the personnel reductions and organizational changes made earlier in the year resulted in cost savings that are currently flowing through the financial results.

INDUSTRY GLOSSARY

• Ruger 2030: The company's long-term strategic plan focused on business modernization, operational discipline, and market expansion.
• Ruger Business System: An internal operating framework used for performance measurement and continuous process improvement.
• Oracle Enterprise Platform: An integrated enterprise resource planning (ERP) software system used to manage business data and processes.
• SHOT Show: The Shooting, Hunting, and Outdoor Trade Show, a major annual industry event for firearm manufacturers and distributors.
• MIM: Metal injection molded parts, a manufacturing technique used for producing complex metal components in firearms.
• Current Ratio: A liquidity ratio that measures a company's ability to cover its short-term liabilities with its short-term assets.

Full Conference Call Transcript

Operator: Hello, everyone. Thank you for joining us. And welcome to Sturm, Ruger and Company's Third Quarter 26 Earnings Call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press 1 to raise your hand. To withdraw your question, press 1 again. I will now hand the conference over to Todd W. Seyfert CEO and President. Todd? Please go ahead.

Todd W. Seyfert: Good afternoon. Thank you for joining us for the Sturm, Ruger and Company's third quarter 2026 earnings conference call. I am Todd W. Seyfert, President and Chief Executive Officer. Before we get started, I would like to turn it over to Sarah F. Colbert, our General Counsel, for the caution on forward looking statements.

Sarah F. Colbert: I would like to remind everyone that some of the statements we make today will be forward looking in nature. These statements reflect our current expectations, but actual results could differ materially due to several uncertainties and risks. You can find more information about these factors in our most recent Form 10 k and other filings with the SEC. We do not undertake any obligation to update these forward looking statements. Reconciliations of any non GAAP measures discussed today are available in our earnings release and on our website.

Todd W. Seyfert: Thank you, Sarah. Our third quarter represented another meaningful step forward in executing our 2026 plan. We delivered another quarter of year over year and sequential sales growth. While also improving profitability on both a year over year and sequential basis. Just as importantly, we continued making significant changes across the organization that will strengthen how we operate and position the company for the future. During the quarter, we implemented our new Oracle Enterprise platform. Continued expanding the Ruger business system, and advance the work necessary to modernize our manufacturing operations.

Following the quarter, we also announced several portfolio decisions designed to reduce complexity and better align our resources with the products and markets where we see the greatest opportunities for consumer demand profitability, and long term growth. Taken together, these actions demonstrate we are doing what we said we would do. We are improving the performance of the business today, while building the capabilities necessary to execute our Ruger 2030 strategy. Now I would like to welcome Andrew Wieland, our chief financial officer. To take you through the financial results.

Andrew Wieland: Thanks, Todd. Net sales for the third quarter were $148 million an increase of 17% compared with $127 million in the third quarter of 2025. Adjusted EBITDA for the quarter was $14 million compared with $3 million in the third quarter of 2025. Adjusted EBITDA margin was 10% driven by favorable product mix continued premiumization within our existing product families, and improved manufacturing efficiencies. Diluted earnings were $0.36 per share compared with $0.10 per share in the prior year period. On an adjusted basis, diluted earnings were $0.44 per share compared with $0.10 per share last year. The board of directors declared a dividend of $0.18 per share for the third quarter.

Looking at the first 9 months of the year, net sales were $447 million an increase of 13% over the same period in 2025. Cash generated from operations was $24 million. At quarter end, our cash and short term investments totaled $101 million. Our current ratio is 3-to-1, and we have no debt. Year to date, our capital expenditures totaled $9 million. As we have mentioned before, we expect capital expenditures to total approximately $30 million for the year. In the first 9 months, we returned $6.4 million to our shareholders through the payment of quarterly dividends, Our balance sheet remains strong and gives us the flexibility to continue investing in the business while returning capital to shareholders.

Todd W. Seyfert: Thank you, Andrew. Overall, the financial results demonstrate that we are growing the top line, improving profitability, and continuing to strengthen the underlying performance of the business. I would like to spend a few minutes connecting several of the changes we have discussed over the past few quarters because they are not separate initiatives. They are pieces of the same strategy. Earlier this year, we formally established the Ruger Business System. The Ruger Business System provides the operating discipline for how we plan, execute, measure performance, and continuously improve. Oracle provides the information and visibility necessary to support that discipline. Together, the Ruger Business System and Oracle give our teams faster access to information improve business processes, and greater accountability.

And we are beginning to use those capabilities to make deliberate decisions about where and how we deploy our resources. That brings me to our portfolio. In October, we announced that we would suspend production of a limited number of product families, and complete final 2026 production and allocation of several others. Collectively, these products represent roughly 4% of our total unit production or roughly $25 million of our total revenues, despite generating minimal to no profitability. These decisions are not about making Ruger smaller. They are about making Ruger stronger.

We are taking a disciplined look at how we deploy our people, equipment, and capital and ensuring those resources are aligned with the products and markets we see the greatest opportunities for consumer demand profitability, and long term growth. This is an important part of becoming a more focused and agile company. Yet I want to be clear about something. Portfolio rationalization does not mean we are pulling back from product development. In fact, it is the opposite. We are creating capacity to focus more resources on the products and platforms we believe Ruger can win. While we are reducing complexity in parts of the portfolio, we are accelerating investment in product innovation.

We anticipate introducing numerous new and innovative models over the coming months. That pipeline reflects the work underway across product development, engineering, manufacturing, sales, and marketing, building next generation of our portfolio. Please stand by. We are becoming more disciplined about where we compete, more flexible in how we manufacture, and more focused on bringing compelling products to market. That combination is imperative to the long term growth of Ruger. At the beginning of the year, we laid out 5 priorities for 2026. Those priorities were straightforward. Improve profitability, align factory capacity with demand, right size the business to our future product portfolio, increase output on proven high demand product lines, and expand into new markets through complete product ecosystems.

3 quarters into the year, we have made measurable progress against these priorities. Profitability has improved. We are modernizing our manufacturing operations and aligning capacity more closely with demand. We have made difficult but necessary portfolio decisions. We are redirecting resources toward products and platforms which stronger opportunities for growth, and we are investing in a significant pipeline of new products that will support the future. At the same time, we are building the infrastructure that supports all these priorities through individual initiatives that matter. The Ruger business system provides that discipline. Oracle provides the information. Portfolio rationalization provides the focus, Manufacturing modernization provides the flexibility.

And product innovation provides the opportunity for growth. that is how our 2026 plan begins building the capabilities required for Ruger 2030. There is still important work ahead. But we are doing what we said we would do. We are executing our 2026 plan while building the capabilities necessary to deliver our Ruger 2030 strategy. Ruger is financially healthy, Our strategy is clear. And our organization is aligned around its execution. The decisions we are making today are not simply about improving the next quarter. They are all about building a stronger, more agile, and more profitable Ruger capable of creating durable long term value for our shareholders.

Before we open the call for questions, I want to thank our employees across Ruger for their continued hard work and commitment. There has been significant change across the organization this year. And our teams continue to respond with tremendous effort and focus. Thank you. Operator, can we please have the first question?

Operator: We will now begin the question-and-answer session. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. The first question is from the line of Mark Smith with Lake Street. Your line is now open. Please go ahead.

Mark Smith: Hi, guys. I wanted to ask first about kind of production and capacity. I think that this might have been your highest number of units produced in several years here this quarter. I am curious how much of this was Kentucky and the addition of that facility and kind of how you feel about how production is running against your capacity?

Todd W. Seyfert: Hey, Mark. So I would tell you it is it is a near term record. A lot of this is the combination of really what we have been doing the last 18 months, which is really this focus on rationalization, making sure that we are focused on the right products where there is high demand. And investing in that additional capacity where we had the backlog that I know we have we have talked about in the past. So think it is a combination of that. it is a combination of the flexibility in terms of product mix, really focusing that product mix, which is making it a little bit easier in terms of planning.

And then finally, I think it is the people getting on board in terms of these priorities across the facilities, All those things together, Mark, I think are what is driving the increased output.

Mark Smith: Perfect. And then looking at your product mix, the ASP on units ordered came in, I guess, a bit lower than expected and lower than historically you have kind of run. Curious, is that purely just a mix thing? Or is there any of the changes in production in development here that you know, maybe impacted some of the orders maybe late in the quarter?

Todd W. Seyfert: No. I think it really does come down to mix, Mark. You know, depending on the time of year, like Q3 and some of the delays around the shipments in the quarter, I think it really comes down to more mix than anything else. Our backlog is still healthy. We are happy with where we sit. Heading into Q4 kinda holiday season Black Friday. So to me, that is more of a short term issue.

Mark Smith: Okay. And the last 1 for me is just looking at distributor inventory. Curious if you can comment on kind of comfort levels. It came up a little bit, but it still seems in a good historical place. But your comfort with the distributor inventory and then any commentary on kind of what you guys are seeing in the demand environment today?

Todd W. Seyfert: Yeah. So I think we are happy with distributor inventory. You know, we monitor that closely, as you know. And to me, it is proxy of, you know, their inventory in the sell through as well as what we see at retail. Generally speaking, we are happy with where you are where Q3 was in terms of consumer demand. And, you know, again, planning for Q4, it really is making sure that our channel is healthy. And I would say that, given where we have been the last year, we are really happy with where distributors sit with inventory as we head into the fall season. Excellent. Thank you. Thanks, Mark.

Operator: Your next question is from the line of Rommel Dionisio with Aegis Capital. Line is now open. Please go ahead.

Rommel Dionisio: Thanks for taking my question. With regards to some of the supply chain initiatives that you guys are putting into place, are you still very much on track with regards to the new product cadence here as we enter the latter part of the year, especially going into SHOT Show of 2027? Thanks.

Todd W. Seyfert: Hi, Rommel. Yes. We are actually very happy with the progress we have made. We spent a lot of time on the. In the organization, really aligning kind of the new product development process. We have a number of initiatives around the launches and I think if you are going to be at SHOT Show, hopefully, I will get to say hello, and you will be able to see the benefit of the introductions that we will do there. But we are happy with where we sit, in the quarter. As far as the new launches that we have planned over the next 3 to 4 months.

Rommel Dionisio: Okay. And just in terms of, you know, with a lot of moving parts on the infrastructure internally, Can you just talk about redeployment of employee resources? I mean, obviously, you are streamlining the product portfolio and so forth. But is there anything set into place from a manufacturing standpoint? From a marketing standpoint with the specific personnel, you know, in place? Obviously, there have been some management additions here. Over the last few months, and I just wanna you know, just check if that is very much in place. As you launch these new products going into the next several months. Thanks.

Todd W. Seyfert: Yeah. I would say our deployment is in line with what we have done in the past. I think in terms of just, you know, headcount, I think 1 of the things that is coming through, in the quarter is some of the actions that we took early in the year. The savings, are flowing through and continue to flow through. So we made the right decisions in terms of allocation of resources. You know, early in the year, we took we took those, numbers out, and we have not replaced them.

And so heading into fall again, I think in terms of the focus on new product development, the cadence that we wanna get into in terms of the amount of new product we are we are launching within a year and within a quarter, we are on track for those. And we have the, what I would call, the marketing and the and the sales programs in place to support those. Great. Thanks very much. Thank you.

Operator: Your next question is from the line of James Kostell with Standish Management. Your line is now open. Please go ahead.

Analyst: In the past month have released new, kind of heritage focused revolver models And I was wondering if you could comment kind of where Ruger sees the revolver market and revolver demand going.

I mean, obviously, you guys discontinued almost all revolver production and kind of know, what you guys are seeing that Smith and Wesson and Taurus might not be then kind of a follow on to that question is are there plans to know, kind of handle. there is a lot of discontent in the gun owner community right now around Ruger's decision to discontinue the heritage lines Are there plans to kind of address that, and are you are you worried about losing customers due to this decision?

Todd W. Seyfert: So I think, a couple of questions there. I think the first 1 is if you look at the total amount of products that we are suspending, and I think it is important that we talk about suspension versus discontinuation. And so the first thing I will say is that Ruger has a history of suspending production when demand is not there. And I think that is what we are talking about here. In terms of the market, I cannot speak to our competitors, but when we look at demand, demand across some of those categories were low enough for us to have these difficult conversations.

If demand returns or if there is a manufacturing opportunity for us to reengineer a product, that makes it better and therefore would increase consumer demand by all means, we will do those things. And so, know, these are things we look at all the time. And we have products that get paused throughout the portfolio. So I think that is the first part of the question. The second part is, listen. We talk to our customers all the time. We. And we talk to whether it is distributor partners, whether we talk to our retail partners or our consumers.

Some of these things are emotional, but when it comes down to the opportunity for Ruger long term, is to make sure that we are listening to what our consumers want, And in the current environment, they are asking for other things than the products that we have put on pause. Gotcha. Thank you. Yes. Thank you.

Operator: There are no further questions at this time. I will now turn the call back to Todd W. Seyfert for closing remarks.

Todd W. Seyfert: Thank you again for joining us today. And for your continued investment in Ruger. We are pleased with the progress we are making, but we know there is more work to do. Our focus remains on executing our plan, improving the performance of the business, and building a stronger Ruger for our customers, employees, and shareholders. We look forward to talk again in the next quarter. Thank you, and have a good evening.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

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