The only downside of Obama being gone? Crashing “Post-Obama Era” Gun Sales Lead To Remington Mass Layoffs
As we noted last summer, the Obama administration’s constant gun control threats did little more than flood American homes with more guns as people looked to stockpile weapons ahead of anticipated new regulations. In fact, both of Obama’s elections resulted in massive and unprecedented spikes in gun sales.
Meanwhile, Obama’s presidency was a boon for the gun manufacturers whose revenue, profitability and stocks all soared during his presidency.
But while the constant threat of new regulations under Obama resulted in a massive full forward of gun demand and pushed gun stocks to all-time highs, the election of Trump, and thus the removal of those threats for at least the next 4-8 years, is having exactly the opposite effect.
If fact, Remington Outdoor just announced layoffs of 120 people at their upstate New York manufacturing facility due to sinking gun demand in the Trump era. Per the Wall Street Journal:
Remington Outdoor Co. has laid off more than 120 workers at an upstate New York factory in response to falling demand for firearms, dealing a blow to an upstate village of 8,000.
Since Donald Trump’s presidential victory eased concerns about stiffer gun laws, the small-arms industry has seen a drop in sales. As a result, orders for Remington handguns have slowed, a company spokeswoman said Monday. That is “a dynamic from which Remington is not immune,” she said of the industry challenges.
The March 8 layoffs are a hit for Ilion, N.Y., where Remington has operated a plant since the 19th century, said Terry Leonard, mayor of the village located about 60 miles east of Syracuse.
“Should they ever just close down totally, it would be a total catastrophe for the entire area here,” the mayor said.
Meanwhile, other firearms makers, including American Outdoor Brands, formerly known as Smith & Wesson, say demand for weapons, particularly handguns, has been ebbing since Trump’s election. Earlier this month the company posted disappointing sales and higher inventories and admitted to investors on their quarterly earnings call that business had slowed…all of which sent the stock into a downward spiral.
Meanwhile, Wedbush equity analyst James Hardiman expects FBI background checks, a good indicator of gun sales, to be down 10-15% in 2017.
Financial analysts said the possibility of new gun laws under the Obama administration almost certainly contributed to strong growth in gun sales last year.
“We do believe that having a Republican in the White House…negatively impacts gun sales in that it effectively eliminates any threat of new gun regulation for the foreseeable future,” said James Hardiman, managing director of equities research for Wedbush Securities Inc.
Mr. Hardiman forecasts a 10% to 15% decline in FBI background checks for 2017.
The gun industry is sure going to miss this guy: