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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Ruger (RGR) Q1 CY2025 Highlights:
- Revenue: $135.7 million vs analyst estimates of $148 million (flat year on year, 8.3% miss)
- Adjusted EBITDA: $14.3 million vs analyst estimates of $18.71 million (10.5% margin, 23.6% miss)
- Operating Margin: 6.2%, in line with the same quarter last year
- Free Cash Flow Margin: 7.4%, up from 4.1% in the same quarter last year
- Market Capitalization: $673.5 million
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.
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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.
The latest quarter from Ruger’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.