Gunmaker American Outdoor Brands plummets 20% after quarterly sales plunge

American Outdoor Brands shares tanked after the reported a large year-over-year sales decline and gave dismal guidance.

The gunmaker said its sales fell 32.6 percent year over year in its fiscal third quarter.

Formerly Smith & Wesson, the company said its results reflect a "continuation of challenging market conditions in the consumer market for firearms."

American Outdoor President and CEO James Debney said there's less demand for firearms and that the company believes this "may continue for some time."

For the current quarter, American Outdoor said it expects adjusted earnings between 9 cents and 11 cents per share on revenue between $162 million and $166 million.

Wall Street had previously projected fiscal fourth-quarter earnings of 38 cents on $205.6 million in revenue, according to Thomson Reuters consensus estimates.

The stock was halted at about 4 p.m. ET prior to the announcement. It reopened 20 percent lower at 4:35 p.m. ET. Shares of American Outdoor fell as much as 26 percent in after-hours trade.

In a Thursday earnings call, Debney gave a brief statement about the February school shooting in Parkland, Florida.

"We share the nation's grief over this incomprehensible and senseless loss of life and we share the desire to make our community safer," Debney said.

The CEO said, "Through our membership and work with National Shooting Sports Foundation we will continue to support the development of effective solutions that accomplish that objective, while protecting the rights of the law-abiding firearm owner."

The massacre in Parkland has renewed calls for gun control legislation and created a greater sense of urgency around how to prevent such tragedies. Following the shooting, several major U.S. companies have dropped their associations with the National Rifle Association.

On Wednesday, President Donald Trump called for stronger background checks and said he would "seriously consider" raising the federal minimum age for purchasing assault-style weapons to 21.

Gun stocks fell to multiyear lows following the news. American Outdoor set a new 52-week intraday low of $8.87 on Wednesday. American Outdoor shares have shed more than 50 percent in the past 12 months.

Big box retailers Dick's Sporting Goods and Walmart also said Wednesday that they would no longer be selling firearms to those under 21.

American Outdoor CEO Debney said during the earnings call that he had heard reports of higher foot traffic at firearms retailers and increased sales.

In the wake of mass shootings, fears of tighter regulations on firearm sales have historically led to an uptick in gun purchases.

Rival Sturm, Ruger & Company has previously attributed tough comparisons to a sales spike during the political campaigns for the 2016 election. Then-Democratic presidential candidate Hillary Clinton had pledged to tighten gun-control measures.