I can only report what I see. If you'd like, I can post pics or even videos of the two plants here, including their parking lots, their loading docks and their truck parking areas (entrance is restricted). What I have observed is a marked difference now and in previous years. You form your own conclusions.
My Prediction on the Availability of Supplies
- Thread starter Nick Caprinolo
- Start date
I suggest you take the following actions. First, buy one share of VSTO. Second, take all those videos and pictures and make sure you dig out the ones you took several years ago since a valid comparison is needed in order to be probative. Third, engage a reputable shareholder plaintiff attorney. Fourth, sue Vista for $20,000,000 for materially false public statements. Let us know how it turns out.
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I'm betting it'll be a few months, as well.
But, yes, it seems to be that supply is slowly trickling into some stores. Here and there, at least. Some prices are still damnably high, IMO nowhere near where they "normally" ought to be. No idea when suppliers will start dropping prices; so long as inflation's hitting, it's likely to stick around awhile. No idea when it'll "feel" right for the average shop to begin dropping prices. If suppliers charge more, given all that's going on, it'll be tough on shops that are faced with lower margins or continuing the rough prices on stocks.
But, yes, it seems to be that supply is slowly trickling into some stores. Here and there, at least. Some prices are still damnably high, IMO nowhere near where they "normally" ought to be. No idea when suppliers will start dropping prices; so long as inflation's hitting, it's likely to stick around awhile. No idea when it'll "feel" right for the average shop to begin dropping prices. If suppliers charge more, given all that's going on, it'll be tough on shops that are faced with lower margins or continuing the rough prices on stocks.
Thank you for your suggestion, Jim T. As a retired attorney, I have had plenty of opportunity to purchase shares of Vista Outdoors, and before that, ATK, were I so inclined. I have no interest in holding their paper. Only in shooting. Were I so inclined to do so though, from an evidentiary standpoint and in anticipation of litigation, your suggestions are on point. However, what I see is what I see. I don't need corporate publications or a reputable shareholder plaintiff attorney to tell me my eyes are lying. There are a myriad of people who accept the well-used excuses of Covid and panic-buying that are willing to do so. I merely voiced my own observations and have no skin in the game other than as a lifelong shooter and reloader.
Another point of curiosity. You mentioned a billion dollar backlog of orders for Vista's ammo and components. Is that based on the wholesale price as it was before the shortage, or calculated based upon the wholesale prices as they have become since, and as a direct result of the shortage? As an insider to Vista Outdoors, can you answer that question?
The initial belief was that new gun owners had created a huge demand for factory ammo and the majority of components were being dedicated to manufacturing ammo. I don’t think this is correct. Sure, there were millions of new firearms sold. Most were sold with one box of ammunition that is probably still intact. All the assurances are that manufacturing is at full speed…where is it going? I shoot .22 rimfires with a club and the majority of the conversation is about trying to find match ammunition. I’m not talking about cheap ammunition…It’s a situation bordering on absurd. When was the last time anyone saw any Lapua rimfire ammo for sale?? The microchip industry - or lack thereof - is about to smack everyone in the face. If you have a good vehicle, maintain it. No one may be able to afford a new one for a while.
Vista Outdoors reports ammunition backlog of over $1B
Big-name shooting sports company Vista Outdoor Inc. reported “over a year’s worth” of backlogged ammunition orders worth more than $1 billion.
Below are links to public disclosures of price hikes Vista has levied since the beginning of the year. I don’t believe these would explain the significantly larger price increases we are seeing at the retail level and certainly would not explain the increase in profits Vista is reporting if production had been cut.
2021 Ammo Price Increases: Federal, CCI, Speer, Remington
Ammunition prices are set to increase in 2021. Federal, CCI, Remington, and SPEER ammo increases of 3-15% starting in April.
Vista Outdoor Announces July Price Increases for Components & Ammo
Vista Outdoor, the parent company for CCI, Federal, Remington, and Speer has just announced that there will be price increases this July.
www.thefirearmblog.com
BTW, I am not an “insider” in relation to VSTO, just a richly rewarded shareholder.
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Yes, I too have read that headline, Jim T. But I am interested to know whether it is based upon prices as they were before the shortage, or prices as a result of the shortage. The beginning of the backlog coincides pretty much with when the "shortage" began (" over a years worth"), but it seems implicit from reading it that they are calculating the billion dollars based upon today's price that they charge retailers. Yes? If so, what is the difference between that price and the price they charged retailers before the "shortage"? I would think that would be addressed somewhere in the corporate publications. And that kinda cuts to the heart of my original question - is the billion dollar backlog the result of the alleged panic buying and profiteering, or is it the result of something else, which is the real reason for the shortages at our retail outlets around the country? For example, and let me break it down a bit, if you slow down production, doesn't demand go up? And if demand goes up, don't prices follow? So, now if you have a billion dollar backlog, what would it have been worth if demand had not gone up? And since it is now a billion dollar backlog, how much more of that is profit than it would have been if prices remained the same as before the "shortage?" I don't have the answers to those questions, Jim T. As a stockholder, I thought you might. Let me ask you this, and it might make it easier for you, have your Vista Outdoors stocks gone up this past year, or down? If up, is it normal for stock in a corporation that is failing to meet its customers' demand to increase in value? Again, I don't have the answers, just questions based upon what I have seen this past year and my natural curiosity.Vista Outdoors reports ammunition backlog of over $1B
Big-name shooting sports company Vista Outdoor Inc. reported “over a year’s worth” of backlogged ammunition orders worth more than $1 billion.www.google.com
I read your referenced article some time ago. The CEO of Vista says "demand" is "far outstripping supply and inventory is at all-time lows" in the supply channels, but while FOX goes on to observe the panic buying phenomenon regarding new guns and gun owners (no shortage of guns available at my local dealers, just ammo and components in spite of millions of new gun owners!), the CEO does not go so far as to actually say the shortage is due to panic-buying of ammo, transportation difficulties, Covid related work issues or any other reasons. He is mute on the subject,. It is only FOX lining up the usual suspects. The article somewhat begs the question I laid out in detail above. So, which came first, the chicken or the egg?
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The article was written in November of 2020 so the backlog was valued based on prices in effect at that time.
As to your other questions they show a general lack of understanding of economic theory so I regret that I have better things to spend my time on than explaining elementary economic basics. However, I can tell you when a Company can not meet demand and their sales and earnings are skyrocketing their stock usually follows suit.
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A little snarky, Jim T., but it was pretty much the response I expected. Cause and effect- Demand soars so profits go up. Basic economic theory? Still no answer is actually given as to the real underlying cause why demand soared though, only several possibilities alluded to. One possibility is suggested in your proffered article, "the product is at an all-time low in inventory and the supply chain". The question is "why" is the product at an all-time low. Causes, again, have been alluded to from the demand perspective, implying that demand had depleted the supply, but, the question has not really been answered. Of course, one "possible" cause might be that the shortage in supply was contrived to drive up profits, rather than increase in demand creating the shortage. Likewise, of course, if that were the case, and if our government ever took an interest (not likely considering its anti-Second Amendment posture), the corporation would be in serious trouble and your stocks' value would plummet. So I do understand your defensiveness when I simply voiced my observations in my first post, and now your snarkiness at your failure to present a real answer to my questions. Notwithstanding your spirited defense of the industry, this is still an issue that puzzles me. We managed to supply ammo and components through 20 years of participation in war on two fronts, to both our forces and our allies. Now, when we are barely participating in Afghanistan or Iraq any longer, we can't even stock our commercial shelves at home?! What is wrong with this picture?
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Would cost of goods sold go up or down if production was cut?
You are most welcome, lb-ft. I have a lot of questions, but no real answers to these so called shortages. Being an old Vietnam veteran, I am just always hesitant to latch on to the commonly accepted answers which are thrown out there so easily, and as a retired lawyer, my hackles tend to rise at "answers" that are really evasions, and news sources that take the party-line and jump on the wagon without ever doing any independent research. (In my previous life, I could object to evasions as "non-responsive to the question", move to strike them from the record, and ask it again until I received an actual answer. In this life, it is not so easy!) For some reason, I can't shake the feeling that all these shortages we see, here, in the grocery stores, in vehicle parts and new cars, etc., - all of it hitting at once to drain our wallets and curtail our activities - are just too coincidental. Since there appears to be no effective governmental oversight any longer and given the obvious conflict of interest created by shortage driven profits, I find it hard to accept pat answers rolling off the tongues of those who stand to profit! Please forgive my verbosity....
I'd say that all depends on other factors within the supply chain. For example, oil . . .
Opec can cut production, but when the US has a large quantity in reserve, the price of gasoline in the US isn't affected much, if a all.
Anyone who price
Simple, anyone that price gouged should be boycotted . I drive a few extra miles to shoot at a range because I was still able to buy boxes of 45acp and 9mm for $6 more than usual. Considering the availability and reasonable increase in price during the shortage, I will always be a patron of that business from now on. The greedy pigs will not get my business. For the most part, I had ammo anyway. Granted I feel naked having had only 3000 rounds , but it was enough to carry me through . I never have less than that. Usually more.
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If cost of goods went up due to production being cut, would profits then go up 29%? I thought you took your marbles and left the arena?
So if production was cut why did cost of goods sold go up??If cost of goods went up due to production being cut, would profits then go up 29%? I thought you took your marbles and left the arena?
If production was cut why would you continue to order raw materials such that your raw materials inventory increased substantially??
Your statement: “For example, and let me break it down a bit, if you slow down production, doesn't demand go up?”, is a classic!!! Must not have required Econ 101 at law schools in the 60’s.
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I didn't see in the article that cost of goods went up, Jim T. Did I miss it? And if it wasn't in the article, does it assume facts not in evidence? The bottom line here, I think, is that profits are up 78% according to your article. Now, I could imagine that the overall cost of goods would go down, if you cut production. You buy less, it costs less. Obviously, if you produced nothing, your need for raw materials drops to nothing. Although it might go up per unit manufactured due to loss of quantity discounts on components or cost of shipping bulk raw materials under certain circumstances if volume of production went down, and the cost of shipping finished product might go up if you lost quantity discounts as well from your shipping companies. Make fewer widgets, it costs more per widget to manufacture and ship. Of course, if cost of goods went down, and price of product went up, the result would be increased profits, would it not? If the price of a box of ammo doubled overnight, would you not expect the profit margin to double overnight too though? But if you significantly cut the production of the product, and still doubled the price overnight, isn't it a possibility that your profit margin might only change by some number like 78% if the cost of manufacturing and shipping went up? The price per box of ammo, powder,primers, casings, and bullets did double on the shelves. I saw that with my own eyes. It happened almost overnight. In some cases it trebled and more. The articles says profits only went up 78%. So, was that due to raw materials going up overnight (I didn't see that with my own eyes), or production being reduced while resultant prices skyrocketed?
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All of the answers to your questions are in the information I have already provided you just have to know how to look for it and understand it.
Thank you for your ever-so- wise and knowledgeable response. I think I read something similar on a fortune cookie once. It's time for my evening walk, down past the Vista Outdoors factories - which brings me back to the beginning. Care to challenge me to a footrace around their nearly empty parking lots? Good night!
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