DONALD-ONOMICS
Longer slog for gun biz while ...
The gun industry just took another nasty shot to the gut.
The largest independent gun retailer in the US on Tuesday slashed its 2017 sales forecasts — and now expects a 2 percent decline compared with estimates of a modest increase just two months ago.
Gun sales have suffered since President Trump was elected on Nov. 8 as Second Amendment supporters no longer felt the need to rush out and buy more guns — as they did in each of the 19 months leading up to Election Day.
FBI gun background checks have fallen in each of the five full months since Nov. 8.
Many on Wall Street expected the gun sales malaise to wear out sometime this summer — but Cabela’s forecast, revealed in a regulatory filing, shows it might linger a bit longer.
Cabela’s, an outdoorsy chain that generates roughly 40 percent of its sales through guns and hunting-related items, has also cut its outlook for 2020 sales by 9 percent, to $4.9 billion, according to proxy materials filed for its October merger agreement with rival Bass Pro Shops.
“We are experiencing unprecedented decline in demand for ammunition and firearms following the presidential election,” Mark DeYoung, chief executive of Vista Outdoor, said on May 11, when the maker of gun brands like Bushnell and Savage Arms lowered its fiscal 2018 forecast.
Sturm, Ruger & Co., meanwhile, on May 8 reported that sales were down 3 percent in the first quarter and earnings were flat.
On Tuesday, Sturm, Ruger shares were up 1 percent, to $63.65, and Smith & Wesson owner American Outdoor Brands unchanged at $22.62.
Vista Outdoor was up 4 cents, to $21.73.
Cabela’s also cut its forecast for 2020 Ebitda — or earnings before interest, taxes, depreciation and amortization — by 18 percent, and 2020 free cash flow by 54 percent compared with earlier projections.
Bass Pro in April amended the original October merger agreement, lowering the price it’s paying for Cabela’s by 6 percent, to $61.50, from $65.50.