Gun manufacturers and dealers faced a slowdown in sales in 2025 that contributed to financial problems for gun companies that went out of business or filed for bankruptcy protection.
Gun enthusiasts are reluctant to buy guns in 2025 as their favorite dealers close their doors.
Gun sales are expected to drop 4.1% to 146 million in 2025, compared to more than 15 million in 2024, according to the National Shooting Sports Foundation, reported by the National Rifle Association’s American Rifleman.
Analysts said the slowdown in the third quarter of 2025 was a wakeup call, but the slowdown continues.
“The slow demand was expected, but not the slow response,” Caleb Seymour, Gearfire’s vice president of data and analytics, told SGB Media. “The third quarter was a wake-up call. The question now is who will adjust before the end of the year and who will be stuck waiting.”
Gun sales fell 3.4% to about 1.58 million in December 2025 from about 1.64 million in December 2024.
The report says the drop in sales may be the result of buyers delaying purchases to take advantage of the reduction in National Firearms Act taxes from $200 to $0 effective January 1, 2026.
On New Year’s Day 2026, 150,000 NFA applications were submitted to the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The National Gun Act tax repeal was part of President Donald Trump’s Big Beautiful bill, which was signed into law on July 4, 2025.
The firearms maker, which closed operations in 2025 and filed for bankruptcy, had its Daytona factory seized by Florida’s Volusia County Tax Office on March 11, 2025, due to unpaid tax debts of about $250,000.
The Daytona Beach, Fla., gun maker filed its petition in U.S. Bankruptcy Court for the Middle District of Florida on Aug. 1, 2025, listing $1 million to $10 million in assets and liabilities.
Custombilt Gun Manufacturing files for Chapter 11 bankruptcy after a licensing battle with the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Shutterstock ·Shutterstock
And now, struggling firearms maker and dealer Custombilt Firearms Manufacturing LLC has filed for Chapter 11 bankruptcy, fighting the Bureau of Alcohol, Tobacco, Firearms and Explosives over its licenses in 2023 and 2024.
The Overland Park, Kan.-based arms company filed its petition in the U.S. Bankruptcy Court for the District of Kansas in Kansas City on Feb. 6, 2026, according to court documents, BK Data reported.
The debtor, who did not specify a reason for filing for bankruptcy, listed $100,000 to $500,000 in assets and $1 million to $10 million in liabilities, according to RK Consultants.
Custombilt’s website does not show any rifles or pistols for sale, but some parts are listed, including complete uppers, complete lowers, multicolor striped lowers, CFM M16 bolt carrier groups, and trigger guards.
The website also offers clothing for sale, such as its own branded t-shirts and hats.
The gun manufacturer and retailer’s website lists five dealers, including the company’s dealer The Bullet Hole in Overland Park, Osage Guns & Pans in Sedalia, Godfrey’s Indoor Range and Tactical Supply in Junction City, Kan., Charger Arms in Linden, Kan., and its own online arms dealer, Arms Online.
More bankruptcies:
“We are a firearms manufacturing company that manufactures AR9s, AR15s, and AR10s using quality parts from around the industry and some proprietary parts,” the company emphasized on its Facebook page.
Debtor has not posted a new message on his Facebook page since November 28, 2022, according to the most recent post on the page.
December 2024, 1.64 million guns have been sold
December 2025, 1.58 million gun sales, 3.4% year-over-year decline
2024, 15.2 million guns sold.
2025, 14.6 million guns sold, a 4.1% year-over-year decline.
The debtor’s gun dealer’s license, which was issued by the Bureau of Alcohol, Tobacco, Firearms and Explosives in 2018, was revoked by the ATF on July 6, 2023, for failing to comply with federal laws and regulations, according to a complaint filed in U.S. District Court against Fire. Department of Justice and ATF July 20, 2023, Court Listener Report.
Plaintiff’s Amended Complaint was dismissed without prejudice by Judge Brooks G. Severson on April 30, 2024, allowing Plaintiffs to refile the Complaint if they so desire.
A company spokesperson was not immediately available for comment.
RELATED: 54-Year-Old Dick’s Sporting Goods Rival Shuts Down, No Bankruptcy
Bullet holes in Overland Park.
Osage Gun and Pawn in Sedalia, Mo.
Strategic Supply in Godfrey’s Inner Range and Junction City, Kan.
Charger arms at Lyndon, Caen.
Online Gun Dealer, Ranier Arms Online.
Related: 39-year-old brewpub and dining chain files Chapter 11 bankruptcy
This story was originally published by TheStreet on February 7, 2026, where it first appeared in the Retail section. Add TheStreet as a preferred source by clicking here.
