Shot down on Street

Gun titan’s earnings dive in ‘Trump slump’

The company that owns gun-maker Smith & Wesson got hammered by investors Friday after it revealed its earnings plunged 90 percent in the most recent quarter.

With President Trump and a Republican-led Congress firmly behind Second Amendment rights, the panic-driven buying that had boosted business during the Obama Administration is no longer goosing sales, according to analysts.

Shares of American Outdoor Brands, which changed its name from Smith & Wesson early this year, saw its shares drop 9.5 percent to $13.51 as it revealed net income in the quarter ended Oct. 31 fell to $3.2 million from $32.5 million a year ago.

During an earnings call after the market’s close on Thursday, CEO James Debney blamed tough comparisons with a year ago, noting that “personal safety concerns and pre-election fears of increased firearm legislation” had made a record year for gun sales in 2016.

Anticipating last year’s surge in demand for firearms — propelled by worries that then-President Obama or candidate Hillary Clinton would tighten gun laws — the industry stepped up produc- tion leading into the election.

But the surprise victory of Donald Trump — a Republican endorsed by the National Rifle Association — has left gun-makers with excess inventories.

“Since then, we have reduced our internal production rates and our outsourced capacity to help lower inventories over the balance of the fiscal year and better align production to consumer demand,” Debney said of the industry’s so-called “Trump slump.”

The gun-maker reported a 36.4 percent decline in sales — to $148.4 million — driven by a nearly 50-percent drop in the company’s firearms segment.

The president made it clear last month — after a mass murder inside a tiny Texas church — that he had no intention of softening his stance against gun control.

Referring to Stephen Willeford, who lived by the church and chased the gunman to his death, Trump said, “If he didn’t have a gun, instead of having 26 dead, you would have had hundreds more dead.”

A bright spot for American Outdoors was its segment that sells such items as knives, gun-cleaning supplies and tree saws.

The company’s dismal performance spilled over to rival Sturm, Ruger & Co., which last month also reported disappointing results.

Its stock dropped 8 percent on Friday, leaving it about even for the year to date.

American Outdoors shares have fallen nearly 40 percent in 2017.