Assault rifle sales are dropping, and they're dropping for one simple reason: The government is not coming to take our guns.
Yes, you read that correctly. As Bloomberg reports, assault rifles sales are dropping, and the culprit seems to be an increased sense among gun owners that President Obama isn't coming for their weapons. It might be a relief for enthusiasts, but it's bad news for gunmakers.
"Everybody wanted to buy one before Congress passed legislation that might take away the right to have one. Of course, Congress never passed that legislation," financial analyst Andrea James told Bloomberg. "The best thing for firearms demand is to have the constant threat of legislation without ever actually having the legislation."
The numbers: One big example is Smith & Wesson, the second-largest publicly traded gunmaker in the U.S. The company has performed below expectations, with last quarter's sales dropping 23% to about $132 million, according to Bloomberg.
Fellow gunmaker Sturm Ruger has seen its stock drop 33% this year. Smith & Wesson attributed the drop to declining sales of long guns, which includes the guns commonly known as assault rifles.
That reading of the sales figures is backed up by FBI data. Requests for criminal background checks, a necessary part of most gun purchases and thus a pretty good way to measure general interest, numbered 1.75 million a month so far this year. That's down nearly 4% from last year, according to Bloomberg.
What it means: Despite the drop in assault rifle sales, the gun industry is still doing just fine in the U.S. The likely trend is away from assault rifles and toward other types of guns, including handguns, which have seen more use thanks to an increase in concealed carry permits.
Some dealers have even started having deals, like buy four get one free, to unload excess rifle stock. "There's not an immediate fear the government's going to take them away so sales are back to a more traditional pace," Atlanta-area gun shop owner Jim Hornsby told Bloomberg. "Assault rifle sales stopped in their tracks."
That being said, a major run on the weapons came after gun control legislation was pushed in the wake of the 2012 school shooting in Newtown, Connecticut. If another tragedy occurs and politicians look toward gun restrictions again, the market could very well turn around in a hurry.