Winchester Ammo Sales Are Booming After Pre-Election Surge

Tuesday, 29 Jan 2013 07:07 PM

 

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Olin Corp., the biggest U.S. retail supplier of small-caliber ammunition, said a surge in sales for its Winchester bullets and shells that began days before November’s U.S. election will continue to bolster earnings through the third quarter.

Pretax earnings at the Winchester unit jumped to $16.5 million during the fourth quarter from $500,000 a year earlier, Clayton, Missouri-based Olin said today in a statement. The segment’s retail revenue growth outpaced military and law-enforcement sales, Olin Chairman and Chief Executive Officer Joseph D. Rupp said today on a conference call with analysts.

“Consumer purchases of ammunition began to trend upward on the Saturday before election day,” he said. “The trend has continued with sales currently only being limited by product availability.”

President Barack Obama’s election and fears of new weapons restrictions after a series of mass shootings have fueled record demand for guns and ammunition. Democratic governors and lawmakers in at least 10 states are seeking new firearms controls in the aftermath of the Dec. 14 killing of 20 children and six adults at Sandy Hook Elementary School in Newtown, Connecticut.

“The current surge is stronger and has expanded across the product line more quickly than the late 2008-early 2009 surge,’ Rupp said. ‘‘We would expect high levels of demand to continue at least through the third quarter.’’

Olin, which gets most of its revenue from chemicals such as caustic soda and bleach, fell 5.8 percent to $22.55 at the close in New York, the biggest decline since July. Olin’s projections for its chlor-alkali unit were a disappointment, Edward Yang, an analyst at Oppenheimer & Co., said in note.

The Winchester unit’s commercial business, which supplies retailers with bullets and shotgun shells, had an ammunition backlog valued at $280 million in January, compared with $29 million at the end of 2011, Rupp said.

New York this month became the first U.S. state to require real-time background checks for ammunition as part of a gun- control law that also bans Internet sales of ammunition. California lawmakers are proposing a tax on bullets and licensing of ammunition dealers.

Such legislation may ultimately reduce Winchester ammunition revenue by ‘‘a couple percent,” Rupp said.

© Copyright 2014 Bloomberg News. All rights reserved.

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