What happened

Shares of Vista Outdoor Inc. (NYSE:VSTO) plunged a whopping 31.1% in November, according to data provided by S&P Global Market Intelligence, after reporting a disappointing loss for the fiscal second quarter.

So what

Quarterly results weren't bad on the surface, but they included some shocking numbers. Quarterly revenue was down 14.2% to $587.3 million and adjusted earnings of $0.34 actually beat expectations. But a $152.3 million impairment of goodwill and intangible assets resulted in a $114.7 million, or $2.01 per share, loss for the quarter on a GAAP basis.

A man and a boy outdoors fishing.

Image source: Getty Images.

What really caught investors attention was guidance that sales for the full year are expected to be $2.24 billion to $2.26 billion, lower than previous guidance of $2.39 billion. That shows a worse than expected deterioration in the business and it's not surprising that shares reacted negatively.

Now what

Spending on outdoor sports activities, particularly gun-related products, are lower this year partly due to a less threatening political environment. It may seem counterintuitive, but people just spend less money on guns and ammunition when gun policy is favorable in the U.S. and that's hurting gun-related stocks. The weak results show a much wider decline in spending, which is a concern and I don't see a quick recovery on the horizon.

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.