Gun sales plunge for Smith & Wesson
Posted June 20, 2018 12:52 p.m. EDT
NEW YORK (CNNMoney) — American Outdoor Brands, the gun maker that owns the iconic Smith & Wesson line of firearms, reported plunging sales on Wednesday.
The company said that quarterly sales dropped 25% compared to the fourth quarter of last year, and profit plummeted more than 70%.
Sales for the full year were down 33% from the year before, and profit plunged 84%.
This is an ongoing problem for American Outdoor Brands, and other gun companies, which have seen sales and profit drop since the 2016 election of President Trump, a Republican endorsed by the National Rifle Association.
But the company still managed to beat expectations, reporting earnings per share of 14 cents. Rommel Dionisio, gun industry analyst for Aegis Capital, said the company guidance and consensus forecast was for 3 cents.
Most of the sales for American Outdoor Brands are from guns. They have two dozen brands, and most of them are for guns or gun-related products, like Crimson Trace laser sights and Gemtech silencers.
The rough times aren't over, according to Chief Executive Officer James Debney.
"We do believe it will return to slow growth over time," he said on a call with analysts. But there are "still some market contractions we see on the horizon."
Gun sales prior to the election were driven to record levels by concerns that a Democratic president would impose more restrictive gun control measures amid a series of mass shootings.
Trump's election diminished such concerns, though the call for more gun control has grown since a mass shooting on February 14 at a high school in Parkland, Florida. Nikolas Cruz used an AR-15-style rifle to kill 17 students and teachers, and to wound 17 others. The Broward County Sheriff's Office confirmed to CNNMoney that the rifle he used was a Smith & Wesson.
Since the Parkland shooting, some companies have tried to distance themselves from guns. Edward Stack, the CEO of Dick's Sporting Goods, said his company would no longer sell "assault-type rifles" and high capacity magazines, and raised the minimum age for all gun sales to 21.
Stack said that he expected "backlash." But the retailer reported in May that online sales surged 24% that quarter, even though same-store sales were down slightly. The company raised its full year guidance.