The tariffs will mostly affect its outdoor products – hunting and fishing equipment that make up more than a quarter of sales. Many of these products are manufactured in China, and the company warned that there are few alternatives other than paying the tariff costs when they come into effect this year.
"As the customs situation continues to escalate, opportunities to offset that impact have begun to wane rapidly," says CEO James Debney in a conversation with investors Thursday. "Our supply chain in China is relatively sophisticated compared to the one available in other low cost countries, so a quick change is difficult. In addition, it takes a long time to bring a brand new manufacturer online, and the duration of the tariff is still very unclear. "
The company did not disclose how much firearms were produced in China, even It said the business was facing the separate problem of softer gun sales across the industry, the company's handgun shipments fell 7% in the quarter, and long-range rifle shipments dropped 8%, much of which was due to campaigns it did at the end of the last quarter which increased shipments during that period, but increased tea sales in the recent period.