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Smith & Wesson: Americans are buying fewer guns

Smith & Wesson: Americans are buying fewer guns By Aaron Smith

Smith & Wesson posted a weak forecast for one simple reason: Americans are buying fewer guns.

Shares of the gunmaker plunged nearly 10% Friday morning as it dawned on investors that the once high-flying gun industry is coming down to Earth.

The gun industry has experienced an intense run-up in demand over the last couple years, fueled by concerns of more rigorous gun restrictions in the wake of President Obama's reelection and a series of mass shootings including the Sandy Hook massacre in Newtown, Conn.

Gun enthusiasts stockpiled the military-style semiautomatic assault rifles, exhausting the supply and driving up the prices. But Obama failed to get a bill through Congress that would have placed restrictions on these guns, alleviating concerns that they would be hard to come by. As a result, rifle sales are suffering.

But there are still signs of growth. Smith & Wesson reported a hefty increase in handgun sales, buoyed by growing consumer interest in self-defense. Chief Executive Officer James Debney said Thursday that unit sales for handguns jumped 30% in the most recent quarter.

Still, Debney said the gain in handgun sales was offset by soft demand for "modern sporting rifles" -- industry parlance for semiautomatic rifles.
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