Expect Ammunition Prices to Increase
Comments during Ammo Inc.’s Nov. 9 earnings conference call indicate enthusiasts can expect cartridge prices to increase for the rest of the year and continue to do so through 2024. Officials from the firm base that prediction on demand for its Streak Visual Ammunition, Jagemann Munition Components, /stelTH/ Subsonic Ammunition and Ammo Incorporated Signature lines. Sell through on Gunbroker, which it also owns, supports that conclusion.
One caller asked if the recent increase in ammunition sales reflected a seasonal trend, rather than an unexpected market shift. Ammo Inc. CEO Jared Smith answered, “So we would expect anywhere between a 5- to 6-percent increase and a gentle trend coming from September into October. This was a pretty sharp trend in that 14.7 percent. And that’s really because these events happened in the second half of October, it was really sharp incline after the events in Israel and Hamas that we saw the uptick.”
Retail prices haven’t—so far—reached Covid-19’s painful level, although “…we’re seeing wholesale pricing increase slightly,” Smith said. “And we continue to see opportunistic buys out there that says that price continues to escalate. So, do we think it will—that this is a long-term hold? We think there is a strategic repricing that’s happening going into the 2024 year.”
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He said the increase in demand, according to results on Gunbroker, includes firearms as well. As for cartridges most in demand, Smith said, “…the stuff that everybody’s running for is 5.56 NATO and .223 Rem., 7.62×39 mm, all your larger rifle calibers, anything related to military calibers, because of the news between Israel and Hamas.”
The company reported a decline in total revenue for the quarter, however, attributed to a decline in its ammunition segment. That loss, according to officials, was largely due to a new, high-volume brass press that preforms cartridge casings. It was idled due to mechanical issues and—coupled with OEM-quality replacement parts still scarce after Covid-19—only recently repaired, tested and expected to go back online soon.
Article by GUY J. SAGI