The average shopper spent $407 over the Thanksgiving holiday weekend, according to the National Retail Federation. And many of these purchases were guns.
"Firearms have taken their place among the basket of mainstream durable goods that consumers look to purchase on Black Friday," says P. James Debney, president of Smith & Wesson Holdings (NASDAQ:AOBC) during the company's Dec. 10 quarterly earnings call. Indeed, Black Friday was the sixth highest single day for National Instant Check System background checks (NICS) since the program begin 1998.
There are a few factors that make Black Friday a hot gun-selling weekend. The Thanksgiving holiday invokes traditions of hunting that, in turn, inspires people to try it themselves. And hunting is increasingly becoming a family event. Between 2006 and 2011, the number of female hunters has increased 25%. Now, 11% of the 13.7 million U.S. hunters are women, according to the U.S. Census.
During the holiday weekend, people are more receptive to buy higher-ticket items, such as firearms. While guns may not seem like an impulse purchase, sales increasingly happen because husbands want to share their hobby with their wives. And since they are both in the store shopping for gifts, they migrate to the gun counter.
"I don't think there is anyone who has ever shot a rimfire [firing cartridge] for the first time in their life [who then] didn't turn around with a huge smile on their face because it was so much fun," says Michael Fifer, CEO of the gun manufacturer Sturm Ruger & Co. (NYSE:RGR) during a Nov. 8 call with analysts. Husbands, particularly, want their wives and friends to experience that same enjoyment.
Tough yearly comparisons
Still, the gun industry has had to contend with record sales in 2012, driven by fears of stronger gun laws in response to the presidential election and Sandy Hook tragedy. This drop-off has been most notable in mid-priced firearms, and the modern sporting rifle categories. The lower and higher-end guns remain in demand, says Sturm Ruger's Fifer. "Somebody who's selling a $600 gun is still probably doing strong and who is selling $1,400 and up like ours is still doing strong."
This tough year-over-year comparison has also affected quarterly earnings among gun retailers, particularly Dick's Sporting Goods (NYSE:DKS) and Cabela's (NYSE:CAB). As a result, these retailers have cut down on product assortment and increased their offerings of gun-related categories, such as camouflage clothing and outdoor accessories.
Shooting buddy for life
While Black Friday may result in overwhelmed staff, both new and old gun owners expect hands-on and knowledgable service. In fact, 23% of Cabela's employees work behind the gun counter. These workers must marry the right gun to the right buyer.
Most husbands, for instance, come in wanting their wives to buy their favorite model, such as centerfires, says Sturm Ruger's Fifer. ""I try to tell them, What you are looking for is not to get your spouse a gun and that's it. But what you are looking to create a shooting buddy for life. Their first firearm should be one that has modest noise, modest or no recoil, and is just sheer fun to shoot."
Now, it's expected that gun sales will be strong in 2014. Sturm Ruger reports that it has 1.8 million units on order which it claims is a "ridiculous" number compared to the typical 300,000. "Next year is going to be an election year," says Sturm Ruger's Fifer. "And I am sure politicians will go at it on both sides and they'll talk about guns and that will spur gun sales again."
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