Top Ammo Maker Posts Huge Sales Gains :: 05/06/2022

Vista Outdoor, which owns several popular ammunition brands, just announced a massive upswing in sales over the past quarter.

The Minnesota-based company enjoyed more than $3 billion in overall sales over its 2022 fiscal year, according to a Thursday news release. That included $464 million in total ammunition sales in the quarter that ended March 31, as well as $183 million in gross profit during that same span. Those were up 56 percent and 98 percent, respectively, over the same period in 2021.

Vista CEO Chris Metz heralded the continued “record-breaking” financial success of the company. He said the growth was driven by strong performance and high demand despite the “current macroeconomic headwinds” of rising consumer price inflation.

“Today, we also announced a very important strategic step for Vista Outdoor that we believe will unlock significant value for our shareholders and our brands,” Metz said in a statement. “After a thorough assessment of our business and value creation opportunities, our Board approved a plan to separate our Outdoor Products and Sporting Products segments into two independent, publicly-traded companies.”

“We’re confident we’ve built two strong businesses that are well-positioned for continued growth and success as independent companies,” he added. “We are very excited to enter this new chapter of growth for the Company and remain committed to continuing to deliver value to our shareholders in the near and long-term.”

The news indicates that, in spite of the rising inflation and economic hardship many Americans are currently experiencing, there remains substantial demand for firearms and ammunition. That demand is likely driven in part by the millions of Americans who purchased their first firearms over the past two years, which would help explain the continued record sales numbers.

While the continued high demand for ammunition is certainly a factor, inflated prices paid by consumers at retail stores are also likely an important factor in the company’s rising profits.

Meanwhile, gun owners are still seeing some shortages of certain ammunition brands and calibers on the shelves.

Supply chain issues coupled with rising demand and bottlenecks that originated or were exacerbated during the coronavirus pandemic bear at least some responsibility for the shortages. However, some critics have argued major corporate conglomerates like Vista are also to blame.

Matt Stoller of the American Economic Liberties Project has argued that the high prices and short supply were actually due, at least in part, to the fact that much of the ammunition production industry has been concentrated in recent years. Acquisitions and mergers have seen the most popular brands consolidated into the portfolios of just two major conglomerates–Vista Outdoor and Olin Corporation.

Manufacturers have argued the ammo shortage was caused by unprecedented demand and supply shortages created the ongoing shortage. Many predicted it would be years before production caught up with the new consumer appetite for rounds.

“I can promise you, even though they’re my competitors, every guy I know in the ammo business is trying to make as much as possible,” Jason Hornady, vice president of Hornady Manufacturing Company, told The Reload last May. “We don’t want to make 30 percent more. We want to make 50 or 100 percent more. And every one of us wishes right now we had an extra factory sitting around ready to go. But that’s not very practical.”

The concentration of production under just two roofs may have contributed to the record profits those companies have enjoyed as well as the supply shortages gun owners have seen.

It’s not clear what effect Vista’s plan to separate its portfolio of ammunition manufacturers — such as CCI, Federal, Remington, and Speer — from its other outdoors supply producers in 2023 will have on the ammo market. But it is clear the country’s largest ammo maker has been able to increase its profits even as gun sales have leveled off.

https://thereload.com/top-ammo-maker-posts-huge-sales-gains/