Posted on Sep 26, 2019
The Reason Colt Is Suspending AR-15 Production Is Not What You Think | The Motley Fool
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It's all about the benjamins.
The Reason Colt Is Suspending AR-15 Production Is Not What You Think | The Motley Fool
Posted from fool.com
Business
2nd Amendment
Rifles
Firearms and Guns
Posted 5 y ago
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Thank you for posting the rather unsurprising news, my friend CW5 Jack Cardwell. Like any other long-term business, Colt is periodically reevaluating its sales position in the consumer rifle market.
Unlike Walmart which seems to be playing both sides of the fence, Colt is realistically focused on pricing versus manufacturing costs, distribution expenses and sales-related expenses.
Pricing is the biggest pressure
"During Ruger's earnings conference call last month, CEO Chris Killoy told analysts, "We see some great prices out there right now on very well-executed M4 platforms like our AR-556. We're seeing a lot of pressure there."
American Outdoor President and CEO James Debny expressed as much, saying the company couldn't really raise prices or had to be very selective when it did, because "if we're not careful, we will just become uncompetitive."
The risk of a weak rifle market falls a little more heavily on Ruger than it does on Smith & Wesson because the former manufactures far more rifles than its rival. Ruger is the biggest gunmaker in the U.S. precisely because it is also the country's biggest rifle manufacturer, making almost 50% more than No. 2 Remington, which declared bankruptcy last year.
Colt says that it will consider reentering the consumer rifle market if conditions improve, but with the weak pricing environment being what it is, Ruger, American Outdoor Brands, and other rifle makers may have a bigger target painted on their backs."
FYI SGT Steve McFarland Maj Robert Thornton SFC Joe S. Davis Jr., MSM, DSL SGT (Join to see) SGT James Murphy CPL Dave Hoover Lt Col Charlie Brown SGT John " Mac " McConnell CW5 Jack Cardwell
Unlike Walmart which seems to be playing both sides of the fence, Colt is realistically focused on pricing versus manufacturing costs, distribution expenses and sales-related expenses.
Pricing is the biggest pressure
"During Ruger's earnings conference call last month, CEO Chris Killoy told analysts, "We see some great prices out there right now on very well-executed M4 platforms like our AR-556. We're seeing a lot of pressure there."
American Outdoor President and CEO James Debny expressed as much, saying the company couldn't really raise prices or had to be very selective when it did, because "if we're not careful, we will just become uncompetitive."
The risk of a weak rifle market falls a little more heavily on Ruger than it does on Smith & Wesson because the former manufactures far more rifles than its rival. Ruger is the biggest gunmaker in the U.S. precisely because it is also the country's biggest rifle manufacturer, making almost 50% more than No. 2 Remington, which declared bankruptcy last year.
Colt says that it will consider reentering the consumer rifle market if conditions improve, but with the weak pricing environment being what it is, Ruger, American Outdoor Brands, and other rifle makers may have a bigger target painted on their backs."
FYI SGT Steve McFarland Maj Robert Thornton SFC Joe S. Davis Jr., MSM, DSL SGT (Join to see) SGT James Murphy CPL Dave Hoover Lt Col Charlie Brown SGT John " Mac " McConnell CW5 Jack Cardwell
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