America’s gun manufacturers are having a tough time getting people to buy guns since Donald Trump was elected president.
Sturm, Ruger, the only company in the US that makes all four types of guns—rifles, shotguns, pistols and revolvers—has seen a sharp drop in sales. According to footnoted, Ruger’s CEO, Chris Killoy, recently told investors that FBI background checks (which retailers must run on anyone who wants to buy a gun) dropped 17% in December from the previous year. In January, they dropped 24%. It’s a similar story at American Outdoor Brands Corp., which owns Smith & Wesson gunmaker.
That a presidential candidate endorsed by the National Rifle Association and an all-Republican congress would be bad for gun makers sounds counterintuitive. But the change in gun makers’ fortunes has a simple explanation. In the run-up to November’s election, when Hillary Clinton looked like she would win, gun owners feared the risk of anti-gun legislation, so they stocked up on guns, especially the kind that might be outlawed.
Trump’s victory meant they didn’t have to worry.
Bob Evans, an analyst at Pennington Capital Management, summed it up best on that call with Ruger’s management: “You’ve never had a better administration for the gun industry than Obama, and now never a worse one for the gun industry than Trump.”
Up until the election, Ruger’s sales were doing great. Revenues were growing sharply, and background checks were up 10%.
“As we discussed in our last call on November 2, just prior to the election, we observed many customers spending discretionary income on concealed carry products and modern sporting rifles in the weeks and months leading up to the election,” said Killoy.
But drops in [FBI] checks were a sign that “consumer demand for certain firearms has softened since last year.”
Smith & Wesson’s parent company said the slump in gun sales after the election offset all the gains it had seen before.
Of course investors didn’t wait for gun makers and retailers to tell them things had turned for the worse. They started dumping gun stocks as soon as Trump was elected.