Why are gun sales falling?

January gun sales slumped in comparison to past years, according to new data from the FBI’s National Instant Criminal Background Check System.

The government doesn’t keep an exact count of firearms sold, but the system can be used as a proxy for sales and is considered an indicator for the industry. According to data kept by the agency, 2,030,530 firearm background checks were logged this January, down from 2,043,184 in the same month last year and 2,545,802 in 2016, which was a record year.

When the background check numbers are adjusted for permit checks, such as concealed-carry applications, the results are more disappointing. (Analysts use the adjusted numbers to obtain a more specific snapshot of firearms industry sales.) “The January number again came in seasonally weak and represented another month of stack declines following last month’s drop off (-31.8% vs. -29.6% in December and +3.7% in November),” wrote Brett Andress, an equity research analyst at KeyBanc Capital Markets, in a report released Monday. “Further, today’s print is the lowest January check since 2012.”

Gun companies have seen slowing sales and dwindling stock prices over the last year. Despite a successful Black Friday, during which just over 203,000 background checks were processed, holiday sales were sluggish.

This is impacted, in part, by politics, as there’s little risk of increased firearm regulation being passed by a Republican-controlled Congress and White House.

“There is no fear-based buying right now,” said James Debney, a chief executive officer of gunmaker American Outdoor Brands Corp. (formerly Smith & Wesson), on a conference call in December.

In a report about American Outdoor Brands released Monday by Wedbush Securities Inc., a securities firm and investment bank, analysts cited firearms-purchasing trends among risks to their price target and rating: “Gun ownership is becoming increasingly concentrated, with fewer gun owners owning more guns, as guns are primarily marketed to people who already own guns.”

Report courtesy Bloomberg