What happened 

Shares of Smith & Wesson manufacturer American Outdoor Brands Corp (NASDAQ:SWBI) fell 21.3% in July, according to data provided by S&P Global Market Intelligence, as sentiment for gun makers went sour. August hasn't gotten much better, with the National Rifle Association saying it's in financial difficulty. 

So what 

American Outdoor reported decent earnings in June, which investors had to hope would bolster shares. But as they digested the 25% decline in revenue to $172 million and a 58% drop in adjusted EPS to $0.24, the positive sentiment wore off. People are simply buying fewer guns and that's a trend that didn't change last month. 

Guns on display at a store.

Image source: Getty Images.

In July, the big news was the Trump administration allowing the release of 3D-printed gun designs on the internet, which will allow people to build 3D printed guns at home. It's not clear if 3D-printed guns would impact regular gun sales in any way, but it can't help, and that's what investors feared last month. 

Now what 

There are a lot of things working against American Outdoor and its gun brands, from an unfavorable political environment to 3D-printed guns. There doesn't seem to be a foreseeable end to either of these trends, which could continue to put pressure on gun sales. Unless fundamentals turn around, this isn't a stock I would count on being a winner for investors anytime soon.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.