American Outdoor Brands Corp. (NASDAQ: AOBC), maker of Smith & Wesson handguns, reported second-quarter fiscal 2018 earnings after markets closed on Thursday. The gun maker posted adjusted diluted earnings per share (EPS) of $0.11 on revenues of $148.4 million. In the same period a year ago, the company reported EPS of $0.68 on revenues of $233.5 million. Second-quarter results also compare to consensus estimates for EPS of $0.07 on $141.8 million in revenues.

The profit and revenue beats were overshadowed by the company’s forecast for the third quarter and the revised forecast for the full fiscal year. The firm dropped its full-year revenue forecast from a prior range of $700 million to $740 million to a new range of $650 million to $675 million. Analysts had been looking for fiscal year revenue of $712.64 million.

Estimated full-year adjusted EPS plunged from a prior range of $1.04 to $1.24 to a new range of $0.57 to $0.67. Adjusted EPS for the third quarter was forecast in a range of $0.07 to $0.12. Analysts had a third-quarter EPS estimate of $0.41 and a full-year estimate of $1.10 per share.

President and CEO James Debney said:

Our results for the second quarter were within our guidance range despite challenging market conditions. Lower shipments in our Firearms business reflected a significant reduction in wholesaler and retailer orders versus the prior year, and were partially offset by higher revenue in our Outdoor Products & Accessories business. Total revenue for the quarter faced a challenging comparison to last year, when we believe strong consumer demand was driven by personal safety concerns and pre-election fears of increased firearm legislation. … As expected, our internal inventories peaked during the quarter, as we prepared for a number of new firearm product launches.  Since then, we have reduced our internal production output levels and our outsourced capacity to help lower inventories and better balance production to demand.

Chief Financial Officer Jeff Buchanan had this to say about the second half of the year:

While cash flow for our second quarter was flat, as expected, we are forecasting positive cash flow for the balance of our fiscal year, as we lower our internal inventory levels in conjunction with the upcoming holiday buying season, new product launches, and winter distributor buying shows which take place during our fourth fiscal quarter.

American Brands (and Smith & Wesson Holdings before the name change) had seen its share price soar more than 2,000% between October 2008 and October 2016, the period when Barack Obama was President and Hillary Clinton looked like a shoo-in to replace him. The stock dropped a quarter of that gain immediately following the election of Donald Trump and closed on Thursday showing a gain of about 850% since October 2008, a drop of about 60% from its peak.

The company’s stock traded down more than 16% in Friday’s premarket session at $12.49, after closing at $14.63 Thursday evening. The 52-week trading range is $12.87 to $24.49. The consensus 12-month price target is $28.93.

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