Smith & Wesson Shares Fall Amid Lower Demand

The gunmaker had seen higher demand during the pandemic, but it has fallen back to pre-Covid levels.

Smith & Wesson-shares-Fall-Amid-Lower-Demand
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Shares of gunmaker Smith & Wesson slipped on Friday after the company’s quarterly report showed that its profit was lower than last year at the same time. Mark Smith, CEO of Smith & Wesson acknowledged that the gun industry had its first summer downturn in three years, calling it a “challenging” quarter. Smith also added that manufacturer orders had been “artificially depressed.”

Highlights for the company’s fiscal 2023 first quarter which ended on July 31, 2022, were as follows:

  • Its net GAAP income stood at $3.3 million, or 7 cents per diluted share. For the same quarter last year, Smith & Wesson had $76.9 million net GAAP income, or $1.57 per diluted share.
  • The company’s net sales saw a $190.2 million decrease and stood at $84.4 for the quarter, a 69.3 percent decline from last year’s quarter.
  • Non-GAAP net income stood at $5.1 million, or 11 cents per diluted share. The same quarter last year had $77.1 million in non-GAAP net income or $1.57 per diluted share.
  • Non-GAAP adjusted EBITDAS stood at $15.7 million compared to $109.6 million from last year’s comparable quarter.
  • The company’s gross margin was 37.3 percent compared to last year’s comparable quarter, which was 47.3 percent.

The company said that demand for its branded weapons was back to pre-pandemic levels. Smith said the company would be correcting its inventory levels.

By the end of 2021 and earlier in 2022, gun demand saw a surge owing to pandemic concerns and civil unrest.

A Lake Street analyst noted, “Although disappointed with results that missed our estimates, we think the company remains disciplined in its approach to long-term growth and prudent management of channel inventory.”

Earlier on Friday during trading, Smith & Wesson shares were about 6 percent lower. Thus far in 2022, its shares are around 25 percent down.

 

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