Politics & Policy

Outdoor Company’s Stock Plummets after Hints It May Sell Off Gun Brand

Hunters fire their shotguns in preparation for the deer-hunting season at a firing range in Joliet, Ill., in 2011. (Jeff Haynes/Reuters)

Vista Outdoor, a manufacturer of guns, ammunition, and other outdoor gear, experienced a sudden and sharp decline in its stock price after announcing the potential sell off of its rifle and shotgun brand Tuesday.

Vista’s share price was down 15 percent Tuesday afternoon after CEO Chris Metz announced a “strategic business transformation plan” that includes the potential sale of the Savage shotgun and rifle brand and other product lines that “fall outside” the core businesses the firm plans to prioritize.

While the statement did not cite the recently intense national gun-policy debate as a motivating factor in the decision, industry analysts believe the current political climate likely played a role.

“With the regulatory environment for modern sporting rifles currently uncertain in the wake of the recent Parkland tragedy, this may also be a factor in their decision to exit the firearms market,” Rommel Dionisio, a gun-industry analyst for Aegis Capital, told CNN Money.

Brian Rafn, a gun-industry analyst for Morgan Dempsey, pointed out that guns represent a minority of Vista’s total sales and as such it’s “not worth the headache” for the firm to continue making them considering the popular backlash against the gun industry.

Vista joins a growing number of gun retailers and manufacturers that have acted in response to the anti-gun public sentiment flaring in the wake of the Valentine’s Day shooting in Parkland. Dick’s Sporting Goods announced in March that it would no longer sell firearms, while fellow gun retailers Walmart and L.L. Bean raised their minimum purchase age from 18 to 21.

Financial institutions have also responded to activists’ calls for change. In March, Citigroup announced new guidelines for gun-industry clients that require retailers to restrict purchases to customers over 21. BlackRock, the world’s largest asset manager, quickly followed Citigroup’s lead, rolling out a number of investment products that specifically exclude gun manufacturers and retailers.

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