Smith and Wesson Holding Corporation announced August 26 sales dropped by $39.2 million for the first quarter of 2015, causing senior company officials to lower their expectations for the coming year.

“We believe that the current environment reflects high inventories industry-wide resulting from channel replenishment that occurred following an earlier surge in consumer buying. That environment, combined with typical seasonality that slows consumer buying activity during the summer, is causing us to lower our financial outlook for fiscal 2015,” said company president and CEO James Debney in a release announcing the company earnings. “We expect that these conditions will have the largest impact on our second fiscal quarter, especially on sales of our modern sporting rifles, and that we will return to a more normalized environment in the second half of our current fiscal year.”

The National Shooting Sports Foundation recently analyzed background checks for the first part of 2014 and found a significant drop compared to 2013. But taking 2013 out of the analysis — a year that saw a surge in AR buying after several mass shootings threatened a renewed national ban — gun sales are still trending upward year-over-year.

The company says slowing sales in “modern sporting rifles” accounted for 87 percent of the nearly $40 million first quarter earnings decline, but with new intros of handguns like the M&P 22 Compact, a new alliance with Crimson Trace for integrated laser sighting systems and a surge in personal defense pistol buying, Smith & Wesson officials are still optimistic the firearms market is growing.

“We believe that our operational and financial strength and flexibility will benefit us in the short term, and we remain focused on our strategy to take handgun market share,” Debney added. “We expect the industry will continue to deliver growth over the long term.”