Rifles are seen at the Sturm, Ruger & Co., Inc. gun factory in Newport, New Hampshire January 6, 2012. REUTERS/Eric Thayer

SAN FRANCISCO (Reuters) - Shares of Sturm Ruger & Company RGR.N fell 3.7 percent on Monday ahead of its quarterly report, which will offer a glimpse of the health of gun makers following a steep drop in demand after the election of Donald Trump as president.

American Outdoor Brands AOBC.O, which owns the Smith & Wesson brand, was down 1.8 percent, while gun and ammunition seller Vista Outdoor Inc VSTO.N dipped 1.7 percent ahead of Sturm Ruger's quarterly report, expected after the bell.

The November election of Republican candidate Trump, who opposes regulations on gun ownership, abruptly undercut demand for guns as people became less worried the government would curtail their ability to purchase firearms.

In its previous quarterly conference call in February, Sturm Ruger President and Chief Operating Officer Chris Killoy said Trump’s unexpected election had led to increased inventories at gun stores and a decrease in demand, leading to a “challenging sell-through environment.”

But demand is showing hints of stabilisation, according to data on background checks carried out by the Federal Bureau of Investigation. After dropping sharply in the months after the election, background checks in April were flat compared with April 2016, according to the National Shooting Sports Foundation, or NSSF.

Sturm Ruger’s stock has recovered about 20 percent since a post-election sell-off hit bottom in mid-March. It remains down 10 percent from before the election.

Short bets against Sturm Ruger grew rapidly after the election and remained high at 33 percent of its outstanding shares in mid-April, according to Thomson Reuters data.

Background checks are the best proxy for data on monthly gun sales, which manufacturers do not release publicly. The NSSF strips the data of applications for conceal-carry permits - typically made by people who already own guns - to give a better reflection of actual purchases.