Gun enthusiasts look over Smith & Wesson guns at the National Rifle Association’s (NRA) annual meetings and exhibits show in Louisville, Kentucky, May 21, 2016. (REUTERS/John Sommers)
American Outdoor Brands CEO James Debney said on Thursday that while the gun maker’s new product pipeline is “robust,” the current lower levels of consumer demand may continue for some time.
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“Going forward, we will operate our business under the assumption that the next 12-18 months could deliver flattish revenues in firearms,” Debney said.
The parent company of Smith & Wesson reported that net sales tumbled 33% to $157.4 million in its fiscal third quarter, missing Wall Street’s estimate of $172.5 million. American Outdoor Brands subsequently cut its financial projections. Adjusted earnings, which exclude one-time items, are on pace to hit 31 cents to 33 cents for the full year, down from the previous forecast of 57 cents to 67 cents.
Gun manufacturers like American Outdoor Brands and Sturm, Ruger & Co. have struggled with weak consumer demand since the election of President Donald Trump. Gun sales tend to climb under Democratic administrations, when buyers anticipate additional gun-control regulations. The industry reported strong sales in advance of the 2016 election. Since then, sales have cooled off, and shares of American Outdoor Brands and Ruger have dropped about 65% and 30%, respectively.
Shares of Springfield, Massachusetts-based American Outdoor Brands plunged another 17.4% to $7.77 in after-hours trading Thursday.
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