The gun industry continues to be hit hard following the election of President Donald Trump last November.
American Outdoor Brands, the maker of Smith & Wesson firearms saw it stock prices plunge by 20% in trading last week following the dismal earnings posted by the gun company.
American Outdoor Brands, the owner of Smith & Wesson posted a quarterly profit that dropped by 90% compared to the same period one year ago. Profits for the most recent quarter were $3.2 million, in comparison to last year’s $32 million during the same three-month period.
The gun maker also posted a drop of 26% in sales compared to the same quarter in 2016. Total revenue during the quarter faced a difficult comparison to the same quarter in 2016, when strong demand by consumers was driven by concerns over personal safety and fears prior to the presidential election in the U.S. and a possible increase in firearms legislation, said James Debney the company CEO.
Last year the company set records for gun sales, thanks to fears that then-President Barrack Obama and Democratic nominee Hillary Clinton would enact gun controls amidst several deadly shootings.
Sales across the industry dropped following the unexpected outcome of the election with Trump winning. The National Rifle Association had endorsed the Republican.
In 2017, American Outdoor Brands stock has dropped 30%. Many gun makers and retailers are dealing with backlogs in inventory because of stocking up before the presidential election in 2016 as they expected sales to be much stronger.
The share price of American Outdoor Brands rose late last week by 5% after the House passed an act involving firearms. If the act – Concealed Carry Reciprocity Act – is passed by the Senate, it would create a system for concealed carry permits that would be good nationwide. That alone might help the industry to recover.
However, firearm stocks plunged on Friday after the company posted its dismal earnings. The CEO said that amongst the few bright stops at the company were strong sales for its M&P brand of compact handguns that are designed to be worn concealed. The lineup of firearms in the M&P brand included rifles that are styled like the AR-15.
The quarter for the company ended October 31, and the report includes a month of sales activity for guns after the mass shooting on October 1 in Las Vegas.
However, it does not have November figures, which saw an increase month to month for FBI background checks, which are a good proxy for sales off firearms.