Revisiting the gun meme…

March 31, 2009

In the 10-K that storied rifle and shotgun manufacturer Remington Arms Co., Inc. filed on Tuesday, it had an interesting observation:

“Management believes that despite the challenges in the banking industry, the resulting stock market drop, unstable fuel prices and the ensuing government bailout, we have experienced no significant adverse impact in our overall sales. We believe the overall market for our products picked up subsequent to the U.S. Presidential election and we believe this is attributable to consumer concerns that the new administration could ban and regulate certain guns and ammunition in a more restrictive manner.”

If you’re feeling a twinge of deja vu, you may be remembering this post from last year, when we looked at the seemingly anomalous Smith & Wesson (SWHC), which disclosed similar language in its 10-Q. At the time, the company said it credited the uptick in sales to —speculation on the outcome of the presidential election. Literally days after the election, we started seeing stories about gun sales soaring and those stories are still coming, judging by this story from yesterday.

Now unlike Smith & Wesson, Remington is not publicly traded, though because it has public debt, it is required to file a 10-K. Still, it seems more than a bit coincidental that both companies would mention the same exact thing in their filings over the course of several months — almost as if it was a planned message like those talking points that seem to circulate around Washington (or on investor conference calls). So we decided to take a look at the numbers for background checks for gun purchases. Now, keep in mind that these numbers don’t represent all gun sales, including personal sales or sales made at gun shows. While it’s true that the numbers show a sharp increase over the past few months — there was a 28.7% increase in January 2009, for example — the general trend going back to 2005 shows a steady stream of increases in background checks. On an annualized basis, background checks have been growing steadily since the second year of the Bush Administration.

So is the surge to arm up real or is it something cooked up by some public relations folks? In many ways, it seems like the latter.

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