The maker of the rifle reportedly used by the alleged attacker in the Florida school shooting in February saw its stock tumble March 1 after sales fell by nearly one-third during its fiscal third quarter.
American Outdoor Brands Corp. said its sales for the three months ended Jan. 31 totaled $157.4 million, 32.6% below the $233.5 million it reported for the year-ago quarter. The company owns Smith & Wesson, which manufactures the M&P15 rifle, a modified version of the AR-15 rifle that Nikolas Cruz allegedly used to kill 17 people at Marjory Stoneman Douglas High School in Parkland, Fla., according to a Feb. 16 report by Time.
In the two weeks following the Feb. 14 shooting, foot traffic at firearms retailers has increased, "and that is translating into some level of increased sales," President and CEO P. James Debney told analysts during a March 1 conference call to discuss the company's results.
"Following prior [gun violence] tragedies, we've tended to get a surge in buying demand, as gun users are concerned that legislation may be passed that would not allow them to buy guns in the future," Cowen and Co. analyst Cai von Rumohr said in his preface to a question during the call.
Still, sluggish gun sales "may continue for some time," American Outdoor said in a statement summarizing its quarterly results. The company also noted that across the broader firearms industry, sales will be "flattish" over the next 12 to 18 months.
American Outdoor shares slid 17.22% to $7.79 in after-hours trading March 1. The company reported results after U.S. markets closed that day.
Revenues from the company's firearms segment accounted for about 74% of all sales during the quarter. Sales of the company's long-barrel semiautomatic-style firearms, also known as modern sport rifles, or MSRs, accounted for between 10% and 12% of all sales during the last nine months, Debney said during the conference call.
Sales of the company's MSRs at Dick's Sporting Goods Inc. totaled about 0.1% during the quarter, Debney also confirmed. Dick's said Feb. 28 that it planned to end sales of assault-style rifles in its stores, and Walmart Inc. and Fred Meyer owner Kroger Co. have since said they plan to raise the minimum age for gun purchases to 21.
As firearm sales lose momentum, the company is expanding its product ranges in other areas. Debney said the Springfield, Mass.-based company debuted new outdoor equipment, including 17 new types of flashlights as well as new fishing supplies.
"We anticipate that most of our organic growth will come from the outdoor products and accessories segment," Debney said during the call.
American Outdoor's results confirm that the market for firearms in the U.S. remains soft. Since the 2016 presidential election, gun manufacturers and retailers have reported weaker consumer demand for firearms.
