Demand plummets as ‘Trump Effect’ takes hold

Age limits and bans on assault-style rifles are in vogue now, but the biggest threat to gun sales may still be President Donald Trump.

Consumer demand is falling to “new, lower levels,” according to the 166-yearold maker of Smith & Wesson firearms. The company, American Outdoor Brands Corp., is bracing for the downturn by cutting jobs and repaying debt. Rivals, including one in bankruptcy, are contending with the same slowdown.

Call it the Trump slump. The gun industry thrived under President Barack Obama, as firearms enthusiasts expected crackdowns and rushed to stockpile weapons. Those fears have eased — and sales have fallen — since Trump won the White House in November 2016. Gunmaker stocks, already on the ropes, took a further hit after the shooting last month at a Florida High School that killed 17 people.

“We will operate our business under the assumption that the next 12 to 18 months could deliver flattish revenues,” American Outdoor Chief Executive Officer James Debney said Thursday on a conference call to discuss earnings.

The gun industry has come under greater scrutiny since last month’s shooting in Parkland, Florida, even if the potential for tighter restrictions on firearms seems lower than when Obama was president.

A social-media movement against the National Rifle Association led to numerous companies cutting ties with the gun-rights group, including Symantec Corp., Hertz Global Holdings, Avis Budget Group and MetLife.

Dick’s Sporting Goods Inc., Walmart Inc. and Kroger Co. said this week they would no longer sell assault-style rifles such as the AR-15, the weapon used in the Florida shooting and made by American Outdoor. The retailers also said they would increase the purchasing age for firearms and ammunition to 21 in their stores.

Some forms of gun control, including magazine restrictions and strengthened background checks, are unlikely to have much impact on the manufacturer, James Hardiman, an analyst at Wedbush Securities, said in a Feb. 27 report. Still, the buying sprees seen in past years, when gun rights were perceived to be threatened under Obama, haven’t materialized under Trump.