Shares of Smith & Wesson Brands (SWBI -0.43%) were down almost 12% in morning trading Friday after the FBI reported background checks on gun buyers tumbled 22% in June.
After three years of the so-called "Trump slump" that followed President Trump's election in 2016, the firearms industry came roaring back last year on the prospect of a so-called "Biden bump" that was based on a trio of forces pushing gun sales higher last year: big-city riots, calls to "defund the police," and the fear President Joe Biden would enact stricter gun control legislation.
Smith & Wesson sales have been at record levels, and it recently crossed the $1 billion sales threshold. But raw FBI data showed background checks on potential gun buyers were down to 3 million, from 3.9 million, year over year in June, while the adjusted figures from the National Shooting Sports Foundation (NSSF), which takes out duplicate checks found in the FBI numbers, showed an even more dramatic 41% decline in June.
It was going to be an uphill battle for Smith & Wesson and other gun manufacturers as they are facing difficult year-over-year comps. Last year was a record year for gun sales as 8 million people chose to buy their first gun, and no one expected that torrid pace to last, though demand remains at elevated levels.
The June FBI data is still well ahead of the 2019 results, and even the NSSF numbers are 11% higher. In fact, last month's tally is still in record territory, second only to June 2020