The “Trump slump” struck again on Wednesday as American Outdoor Brands Corporation, the gunmaker formerly known as Smith & Wesson, reported another sharp drop in sales.
Full year net sales were $606.9m compared with $903.2m a year ago, a decrease of 32.8%. Firearms sales alone were even harder hit, dropping more than 40%.
The results followed an established trend set during the Trump era. Gun sales have tumbled as the threat of tighter gun laws have receded under the pro-gun lobby president, leaving the companies with too much inventory on their hands and falling revenues.
Sales – and gun company share prices – hit record highs under Barack Obama, who tried, but failed, to bring in tighter gun laws. Following Obama’s comments after a series of mass shootings gun owners stocked up ahead of a feared crackdown.
“Fiscal 2018 was a year characterized by lower consumer demand for firearms, heightened levels of inventory in the consumer channel, and a host of aggressive, industry-wide promotions,” said James Debney, American Outdoor Brands’ chief executive officer.
Despite the drop, investors reacted warmly to the results, pushing shares in American Outdoor up 5.8%. The company said it anticipated higher earnings toward the end of the year as it cleared out existing inventory and cut firearm production.
In December, American Outdoor Brands reported that its profits had fallen 90% year over year, from $32m to just $3.2m. Sales fell 36%.
Last October, Sturm Ruger, the US’s largest firearm manufacturer, announced its quarterly revenues had fallen 35%. Both companies will report their latest results shortly but neither is expected to announce a dramatic increase in sales.
Remington, the oldest US gun maker, is using the US’s chapter 11 bankruptcy law to offload $700m of its $950m in debt, and to restructure the company.
