After a record year for gun sales in 2013, the market has experienced a dramatic reversal of fortune in 2014 as gun companies are having trouble managing the expectations of stockholders.
In the recent quarter, Smith & Wesson, one of the largest American manufacturers of guns, saw sales drop 23 percent to $31.9 million and overall profit fall 45 percent to $14.6 million. Their shares slipped nearly 15 percent once the news of the decline in sales spread to investors. Sales of modern sporting rifles, long guns, and handguns also saw decreases in overall sales. Sturm Ruger saw comparable drops in their sales and both companies are grasping at straws to find the reason for the decline.
Executives for Smith & Wesson and Sturm Ruger have said that high inventory is to blame for the lows sales, which suggests either a low demand for the product or too much supply. Sturm Ruger went a step further by suggesting that a lack of guns with "cool" appeal were being manufactured, which is supposed to explain the small demand for new firearms.
Studies have shown that the gun business doees well when lawmakers propose new legislation for gun control because of concerns that guns will become harder to purchase. For example, the Sandy Hook shootings corresponded with an influx of gun purchases because of President Barack Obama's push for additional gun regulations. Gun executives have been quick to point out that hunting season is arriving, an annual period that produces an uptick in gun purchases.
"We're hitting the brakes, and we have the most desirable products, and we are coming into the busiest season," said James Debney Smith & Wesson's chief executive. "I think we are going to be in a great spot."
The sale of guns is unlikely to slow down anytime soon, national tragedy or not. If regulation on gun control does go through, it will be interesting to see how not just the sale of guns, but the marketing of them, is affected.
