Thread: Gun Sales Hinge on Obama Re-Election

As Cabela's Inc. CAB +0.86% prepares the selection of guns it will sell for the holiday season and winter hunting, the outdoor-gear retailer has two plans: one if President Barack Obama is re-elected, and one if he isn't.

The Sidney, Neb.-based retailer and other companies in the guns-and-ammo business say if Mr. Obama wins a second term they are preparing for a surge in sales?the same as they saw after he was elected in 2008?from buyers fearful the president would back policies to make buying a gun more difficult. If Republican challenger Mitt Romney wins, though, the chain plans to stock more items such as waterproof boots and camouflage hunting gear.

"If Mitt Romney is elected and there's no perceived threat on the freedom to own guns, people might decide to spend disposable income on things like outerwear instead," said Joe Arterburn, a Cabela's spokesman.

Even though there haven't been any substantial changes to gun-control laws under Mr. Obama, Cabela's, Bass Pro Shops, Smith & Wesson Holding Corp. SWHC +1.29% and Olin Corp., OLN -0.31% the maker of Winchester bullets, are anticipating another bump in sales this winter if President Obama is re-elected.

Smith & Wesson raised its full-year sales forecast last week to $530 million to $540 million, up from its previous estimates of $485 million and $505 million, citing strong consumer demand that led to a 30% jump in the number of firearms sold in the first quarter of 2013 compared with the year before.

Closely-held Bass Pro Shops said it also expects gun sales to ramp up heading into the 2012 election, but declined to disclose sales figures.

Cabela's saw a 25% increase in new gun buyers right after the 2008 election, and continues to see strong sales, aided by an uptick in female and younger customers, according to Mr. Arterburn.
Wal-Mart Stores Inc., WMT -0.05% the largest U.S. seller of firearms and ammunition, declined to comment on its gun sales.

Retailers' preparations reflect business, not political, concerns, experts say. "Besides making up a large chunk of revenue, guns are a real traffic driver for these stores," said Wells Fargo analyst Matt Nemer. "Businesses are trying to plan, order inventory and staff stores, and you have this event coming down that could significantly impact sales."

The stores are responding to shoppers like David Humke, a 43-year-old manager at a bolt and screw company in Louisiana, who recently stopped at a Cabela's store in Allen, Texas, to browse its selection of collectible guns.

Mr. Humke, an avid deer hunter, worries guns might become less available in the future. "People feel it's coming so they're stockpiling," he said.

Adam Fetcher, a spokesman for the Obama campaign, defended the president's policies. "President Obama's record makes clear that he supports and respects the Second Amendment and the tradition of gun ownership in this country, and we'll continue to fight back against any attempts to mislead voters," he said.

The Romney campaign declined to comment.

Consumers are responding in part to advertisements from advocacy groups such as the National Rifle Association, which warn voters that they could face increased gun regulations if President Obama is re-elected.

In a second term, President Obama wouldn't have to be worry about being re-elected so "there's no political downfall if Obama enacts more stringent gun-control measures," said NRA spokesman Andrew Arulanandam.

Nearly 12 million background checks for gun sales took place in the U.S. this year through Aug. 31, up 56% from the same period in 2008, according to the Federal Bureau of Investigation. Customers must undergo background checks before buying firearms from federally licensed sellers.

Collections of federal excise taxes on the sale of new firearms and ammunition, a proxy for gun sales, rose to $453 million in 2009, a 45% jump from the year before. That's a significant surge compared with the average 6% annual increase reported by the Treasury Department's Alcohol and Tobacco Tax and Trade Bureau from 1993 to 2008. Excise tax collections have moderated somewhat, to $344 million in 2011, but remain above pre-2008 levels.

As demand has risen, supply hasn't kept up. Manufacturers are experiencing backlogs, even as they raise prices and report record profits.

Citing the political impact of the election, Olin said its June backlog doubled compared with the year before. The company has said it plans to raise ammunition prices by 2% to 6%.

Many suppliers of guns and ammo have been concerned that increased demand may not last and so have been hesitant to invest in additional manufacturing capacity, leaving retailers worried about adequate supplies.

Cabela's, which generates about a fifth of its $2.8 billion in revenue from firearms and ammunition, is offering to pay suppliers more quickly, 15 days in some cases, in hopes of becoming a favored destination for the limited inventory. It can take some retailers up to 120 days to pay gun and ammo manufacturers.

"This way, vendors know exactly what we're expecting from them and we know they're going to deliver reliably," said Fred Neal, senior director of merchandising for firearms.
?Danny Yadron contributed to this article. Write to Shelly Banjo at shelly.banjo@wsj.com

Originally Posted by Big Pimpin

My thought has always been they will somehow kill our ammo supply (vs taking our guns) because while the average guy might have 5 or 10 guns, he probably doesn't have 1000rds for each one.

Right and some people, like me often forget that.