American Outdoor Brands, owner of Smith & Wesson, just reported a nearly $100 million fall in firearms revenue for second quarter FY2017 compared to the same quarter last year. Shipments of long guns were down 57% and shipments of handguns were down 35%, resulting in a 40% drop in overall revenue year-to-year.
Chief Executive James Debney told shareholders that the passage of the Hearing Protection Act, which would remove silencers from the National Firearms Act, was an area of potential growth for the company, which also owns Gemtech Silencers.
Industry analysts had predicted that demand for firearms and ammunition would drop significantly after Donald Trump won the election for president, labeling it the “Trump Slump” even before earnings reports confirmed their suspicions. Just as Barack Obama accidentally became the best gun salesman in US history, the removal of fear that entire categories of firearms and magazines would be banned seems to have removed the motivation for consumers to buy more of both.
This reduced demand isn’t just limited to gun manufacturers. Retailers are also feeling the impact of reduced store traffic from gun shoppers. Cabela’s recently blamed a 9% drop in quarterly in-store sales on weak gun sales.
However, these drops were from pretty lofty heights achieved at the end of President Obama’s eight years in office. Though the industry will change dramatically if this drop in sales persists, surviving manufacturers and retailers will likely still be stronger financially under President Trump than they were prior to the 2008 campaign season.