New York (CNN Business) Tariffs are about to become a big problem for American Outdoor Brands, the maker of iconic Smith & Wesson firearms.

The company reported weaker than expected earnings Thursday because of a drop in gun sales. It also warned investors that it will take a $5 million hit to earnings in the second half of the fiscal year due to the impact of tariffs from the escalating US-China trade war

On Friday, American Outdoor Brands stock dropped 22%, to 6.01 from 7.68 a day earlier.

The tariffs will mostly affect its outdoor products -- hunting and fishing accessories that account for more than a quarter of its sales. Many of those products are made in China, and the company warned it has few alternatives other than to pay the cost of the tariffs when they take effect this year.

"As the tariff situation continues to escalate, opportunities to offset that impact have begun to rapidly diminish," said CEO James Debney in a call with investors Thursday. "Our supply chain in China is relatively sophisticated compared to those available in other low-cost countries, so a rapid change is difficult. In addition, bringing an entirely new manufacturer online takes time, and the duration of the tariff is still very unclear."

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