Bloomberg opens up the door to a rare look at the corporate finances of the world's most popular handgun manufacturer and discovers sales have collapsed under the Trump presidency.
Before Donald Trump won the 2016 election, former President Obama was America's best gun salesman. Americans were panic buying firearms, as if the apocalypse was tomorrow, partly due to the fear of stricter federal gun laws. AR-15 style rifles and Glock pistols were some of the most popular items paranoid Americans had to have, and of course, ammunition, meal kits, water, and underground bunkers.
Glock Ges.m.b.H., the most popular handgun company in the world, experienced a rather sharp decline in sales during President Trump's first year in office. Bloomberg said Glock sold 36% fewer pistols in 2017 and revenue fell 35% to 464 million euros, the company is located in Austria, as per its latest annual report. Net income declined 58% to 67.9 million euros, following massive profits in the Obama era.
"Demand normalized in 2017, dealers adapted their excessive stock levels and many competitors had extremely aggressive pricing and promotions," Glock said in the report. Glock expects another decline in 2018 but expects full-year sales to rise. The report also warned about how revenue is susceptible to currency volatility in international markets. There was no mention of trade wars or rerouting supply chains, as of yet.
Glock's financials mirror US gun manufacturers like American Outdoor Brands Corp.'s Smith & Wesson or Sturm Ruger & Co., which have also reported a slump in sales since President Trump took office.
"Closely-held Glock-founder Gaston Glock's family trust owns 99% of the company, and his estranged ex-wife Helga holds the balance--is under very limited disclosure requirements, making the company's results a bit of a mystery. Glock doesn't publish sales or financial results on its website but only files an annual report to the Austrian company register, where the document-a collection of scanned pages-is behind a paywall. The 2017 report is dated May 30 and was filed to the register at the end of September," said Bloomberg.
Austria is by far the most significant source of handgun imports into the US, representing 1.2 million of the 3.3 million total in 2017. The reason, well, in the 1980s, Glock disrupted the firearms industry by offering a new pistol with higher ammunition capacity. Today it is carried by armies worldwide, from the US Army to British Special Forces.
With US gun sales still declining and the number of background checks (a proxy for sales) fell -5% in August from a year ago, the Obama gun bubble seems to have popped on Trump's watch. One of many bubbles that are certain to deflate in the near term.