American firearm manufacturing company Ruger (NYSE:RGR) fell short of the market’s revenue expectations in Q1 CY2025, with sales flat year on year at $135.7 million. Its GAAP profit of $0.46 per share increased from $0.40 in the same quarter last year.

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Company Overview

Founded in 1949, Ruger (NYSE:RGR) is an American manufacturer of firearms for the commercial sporting market.

Sales Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Regrettably, Ruger’s sales grew at a sluggish 4.9% compounded annual growth rate over the last five years. This was below our standard for the consumer discretionary sector and is a rough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Ruger’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 3.9% annually.

This quarter, Ruger missed Wall Street’s estimates and reported a rather uninspiring 0.8% year-on-year revenue decline, generating $135.7 million of revenue.

We also like to judge companies based on their projected revenue growth, but not enough Wall Street analysts cover the company for it to have reliable consensus estimates.

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Operating Margin

Ruger’s operating margin has shrunk over the last 12 months and averaged 7.2% over the last two years. The company’s profitability was mediocre for a consumer discretionary business and shows it couldn’t pass its higher operating expenses onto its customers.

In Q1, Ruger generated an operating profit margin of 6.2%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for Ruger, its EPS declined by 1.3% annually over the last five years while its revenue grew by 4.9%. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

In Q1, Ruger reported EPS at $0.46, up from $0.40 in the same quarter last year. We also like to analyze expected EPS growth based on Wall Street analysts’ consensus projections, but there is insufficient data.

Key Takeaways from Ruger’s Q1 Results

We struggled to find many positives in these results. Its revenue missed significantly and its EBITDA fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 4.4% to $38.85 immediately after reporting.

Ruger may have had a tough quarter, but does that actually create an opportunity to invest right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.