| SAN FRANCISCO
SAN FRANCISCO May 8 Shares of Sturm Ruger &
Company fell 3.7 percent on Monday ahead of its
quarterly report, which will offer a glimpse of the health of
gun makers following a steep drop in demand after the election
of Donald Trump as president.
American Outdoor Brands, which owns the Smith &
Wesson brand, was down 1.8 percent, while gun and ammunition
seller Vista Outdoor Inc dipped 1.7 percent ahead of
Sturm Ruger's quarterly report, expected after the bell.
The November election of Republican candidate Trump, who
opposes regulations on gun ownership, abruptly undercut demand
for guns as people became less worried the government would
curtail their ability to purchase firearms.
In its previous quarterly conference call in February, Sturm
Ruger President and Chief Operating Officer Chris Killoy said
Trump's unexpected election had led to increased inventories at
gun stores and a decrease in demand, leading to a "challenging
But demand is showing hints of stabilization, according to
data on background checks carried out by the Federal Bureau of
Investigation. After dropping sharply in the months after the
election, background checks in April were flat compared with
April 2016, according to the National Shooting Sports
Foundation, or NSSF.
Sturm Ruger's stock has recovered about 20 percent since a
post-election sell-off hit bottom in mid-March. It remains down
10 percent from before the election.
Short bets against Sturm Ruger grew rapidly after the
election and remained high at 33 percent of its outstanding
shares in mid-April, according to Thomson Reuters data.
Background checks are the best proxy for data on monthly gun
sales, which manufacturers do not release publicly. The NSSF
strips the data of applications for conceal-carry permits -
typically made by people who already own guns - to give a better
reflection of actual purchases.
(Reporting by Noel Randewich; Editing by Dan Grebler)