Smith & Wesson rode the post-Obama II, post-Newtown gun sales surge like surfer Serena Brooke rides a Gold Coast roller. Smith racked up historic profits and increased their already impressive market share. They made so much money, in fact, they dodged the bullet of their bone-headed brand extension into the security business. The party’s not over, there’s plenty of cash to be made in the new normal, but the Cristal has run out. “Gunmaker Smith & Wesson [stock price] was down more than 11% in early trading after the company slashed its full-year sales expectations for the second time in two months,” businessinsider.com reports. Guess what Smith pumped out during the surge that’s dragging them down now. . .

On Tuesday, the company said full-year sales were now expected to be $530 million to $540 million, well short of current estimates for about $593 million, and also sharply lower than the $585 million to $600 million expectations the company laid out in June.

The company also said that for its fiscal first quarter that ended July 31, Smith & Wesson reported revenue of $131.9 million, lower than the $133.4 expected by analysts, and down $39.2 million from last year.

The company said lower sales of long guns, including modern sporting rifles, drove 87% of this first-quarter decline.

Gross profit in the second quarter was $49.1 million, down from $72.8 million in the prior year period, and the company earned $0.26 per share, slightly better than the $0.25 expected by Wall Street.

Smith & Wesson said, however, that handgun sales showed “continued consumer demand for the company’s small concealed carry polymer pistols and revolvers.”

As branding guru Al Reis warned since the days when Mad Men were only slightly miffed, the tighter the brand focus, the stronger the brand. Smith & Wesson makes handguns. They should have created a separate brand for their MSRs. Anyway, I’ll add to the company’s bottom line with a 460 VXR, soon. Joy!

73 Responses to Smith & Wesson’s Stock Tanks

      • Michael B., I’ve removed the locks from my S&Ws. It takes a couple of minutes. I learned how to do it from Youtube vids. Yeah, it’s that easy and does not leave a hole. The only thing that needs to be removed is a small internal leaf.

        • No, it doesn’t leave a ‘hole.’ Instead, it leaves an engraved arrow, a ‘port,’ and a black socket-head widget glaringly visible just above the cylinder latch, and said leftover bits are totally irrelevant to the operation of the gun. On the other hand, they ARE a fixed monument to the stupidity of letting businessmen with political bents get involved in making guns.

          I have always liked S&W, and carried their guns for at least half of my police life; I could even be convinced to accept an S&W-brand Glock as a gift and might not immediately sell it. An S&W revolver with a frame-mounted firing pin, MIM internals, and a ClintonLock on-off switch, though, is something that would immediately be traded for an old S&W revolver with machined and fitted internals and no hole in the frame to house useless bits.

    • You don’t want it. They are using a blued trigger, hammer and cylinder release. It looks god awful. Thats before you have to get over the useless lock.

    • I would really like to see them put out a 9mm 637 style revolver. Would be cool if it didn’t need moon clips, but I would be fine if it had to have them.

      • My only revolver is a 6 inch 586, so my experience is limited to say the least (don’t even get me started on the 12lb DA trigger pull), but why don’t you like moon clips? As someone who grew up with semi autos, I find reloading individual rounds to be tedious as all hell, and speed loaders are bulky and clumsy. Moon clips seem like a good compromise?

  1. You’re getting a 460? I want to see you shoot that!

    By the way, I’d like to submit an article. Who do I e-mail it to?

    • Yep.

      I had my gunsmith remove the entire storage lock and install a stainless steel plug on a 686 I got for a song, though. Since it’s locked up in a safe when not in use and there are no kids around I’m not worried about it.

      • Removing the lock is a DIY job. There’s no need to plug anything since the only thing that’s removed is a small internal leaf. There are Youtube vids that show the procedure. If you work really slowly, it will take just a few minutes.

        • I wanted all the lock components out of the gun and since I’m a newb when it comes to taking revolvers apart I didn’t feel comfortable enough do it myself at the time. It cost me about $20 bucks for the plug and $25 to have it all removed and the plug installed.

          If I were to buy another lock revolver I’d do it myself.

        • There are four mandatory issues anyone needs to know to disassemble and re-assemble a S&W revolver:

          1. USE THE CORRECT SCREWDRIVERS. Yes, I’m shouting. If a newb were here in person, I’d also be whacking a yardstick upside their head. This is a truth for all guns. Use the correct and proper tools (whack) or (whack) at some point (whack), you’re going to piss off someone (whack) who appreciates nice guns (whack) by leaving an abortion (whackitty whack) in your wake (whack, whack, whack). Don’t (whack) make (whack) abortions (whack) out of (whack) nice (whack) guns! (whack).

          The #1 thing I see on revolvers is buggered up screw heads and an abortion made of the area surrounding the screws on revolvers by using a screwdriver that didn’t fit, and was a mechanic’s screwdriver and not a gunsmith screwdriver.

          Don’t do that. Get a set of real gunsmith screwdrivers, find a screwdriver that fits the screw both in slot width and in the length of the slot (ie, slightly smaller than the diameter of the screw head) before you attempt to remove a screw.

          If you don’t know the difference between a mechanic’s screwdriver and a gunsmith’s screwdriver, then don’t try to take guns apart.

          2. DO NOT PRY OFF THE PLATE ON THE SIDE OF THE FRAME. Again, I am shouting. Actually, I’m getting pretty worked up right here.

          I see buggered plates and frames from someone trying to pry up the closely-fitted cover plate on the side of the frame. Don’t do that. Instead, remove the grip(s), remove the screws, then while holding the gun by the window of the frame in one hand, use a wooden hammer handle to lightly rap on the handle area (you did remove the grips, remember?) and the plate will simply rattle loose. Pick off the plate with your fingernails.

          3. If you’re going to detail strip a S&W, you will need a tool to compress and remove the rebound spring. This is a piece of round stock that has been bent into a dog-leg and a slot cut into the end of it to compress the spring. Don’t get in there with a small screwdriver or a small pair of needle nosed pliers. Again, a professional gunsmith will be able to tell that a hack has been into the gun unless you use the correct tools for the job.

          Some gunsmith screwdriver sets will have a S&W rebound spring compression tool you can slip into the screwdriver handles in these sets. I made my own spring compression tool out of cheap steel, cut the slot with a hacksaw and files, and glued it into a wooden handle. This isn’t rocket science, folks, S&W revolvers have been around for awhile.

          4. The screw that tensions the mainspring is either all the way out of all the way in and tight. It is not an adjustment for the trigger pull.

          People who want to know more about S&W revolvers can do much worse than buying Kuhnhausen’s books on the subject.

    • Don’t look now, but no one I know likes their ammunition or reloading components either, and they had a big honkin’ recall of Model 700 rifles too.

    • They did a decent job with the R1, but they didn’t have to reinvent the wheel so they had that going for them. The R51 looked promising…

      • Well, they did an only OK job on the R1. It is a Series 80 style gun, and as a result, will always have compromises in the quality of the trigger pull.

  2. So I was looking at the market this morning and saw SWHC is down a little bit from where I sold it right before 1 year Newtown anniversay (havingg purchased it and Ruger 2days post Newtown). Interesting play here. Ruger is down 50% from where I sold (almost exactly where I bought it the first time). Spare cash in the IRA and thinking Barry Soetoro and the liberals will double down on gun ban talk before the November elections. . . . Very interesting.

  3. Oh, THAT kind of “stock tanks”. I was wondering what S&W had to do with man-made water holes for cattle…

  4. To everyone who said a year ago “why aren’t all manufacturers going into massive debt to tool up enough to meet the demand?” well now you know.

    • I’ve damn near pulled out my own hair having that argument with armchair CEO’s who have no idea how an actual business runs.

      Millions of dollars worth of long term debt to satiate a potentially short term buying frenzy….. Sounds like a GREAT idea…. or not.

      • As opposed to maximum utilization of existing resources for some period, hopefully YEARS, operating at maximum potential profit. Let me see which I would choose. Maybe what YOU would like me to do, or maybe what would provide me the most $$. I’ll think on it.

  5. I read that as “Smith and Wesson Stocks Tanks” and expected an article about that BFR in the picture..
    Disappoint.

  6. I thought the M&P 15 SPORT was supposed to be one of the best values in MSRs? From the comments above, maybe I’m mistaken? Any advice?

    • I don’t think you are missing much without the dust cover or the forward assist(at least for range use), but I kind of wish it had a chrome lined barrel. As long as you don’t go in expecting super high round counts or doing mag dumps, it probably doesn’t matter. I am OCD though so even though it may not matter with how I shoot rifles, I would be bothered by it if I did not have a chrome lined barrel.

      • Isn’t it coated with something inside and out? Not chrome, but some new thing a few mfgs came out with. Can’t remember what it is called, think it is similar to nitride.

    • The sport did very well for them. They could not keep up with the demand so they switched barrels without telling the buyers! They went from a fantastic 1:8 5R twist, melonite treated barrel, to a 1:9 twist chrome barrel.
      The dust cover and especially the forward assist are not important to me and many other non-operators (which there seems to be millions of out there. It embarrasses people who have paid more for their rifles but got less weapon. The market is pretty much saturated is why sales are going down. What a bargain they are especially during the panic.

  7. There should be a “DUH” following the article title.

    They missed their analyst forecast by 1%, the sky is falling…

    Gunmakers not selling as many guns as last year. Up next: Water is wet and progressives want more free stuff.

    • I agree. I own a 4″ 1975 15-3 .38spl and a 6″ 1977 28-2 .357 magnum. The older ones have more character and charm than the newer. Or maybe its because I can’t afford…IDK…

        • That is a good price! Roughly 3-4 yrs ago for my 15-3, I paid $375 plus FFL, plus shipping. I still think it was a steal! Good for you! *fist bump*.

    • M&P Sport AR-15s are running $599 to $650 new, and have very complimentary reviews from everybody. How much cheaper do you want? I paid more that much for a Colt Mustang Pocketlite .380 pistol.

  8. While MSRs were in short supply, anyone making them could sell them without much effort. Now that things have calmed down in the marketplace and people have choices, many of us are choosing to send money to MSR manufacturers based in free states.

  9. Get rid of the Hillary Holes on your guns and I’ll buy your revolvers again.

    I don’t care if it’s perfectly fine, “I never had a problem with mine”, whatever. It doesn’t belong there.

    Bleh.

  10. I’m not a fan, but would buy the stock, buy their products to prevent a slump that’ll just compound the one at Big Green. I believe it was the plan all along, cause the boom / cause the bust. I would spend some $ just to beat them at that game. Let’s get them to move out of / cease sales to anti-gun states.

  11. I helped them out last week by purchasing a Shield. This makes the third year in a row I bought from them. Last year it was a 15-22, the year before an M&P full size. Every one of them has been high quality firearm. I think anyone could see the craze of last year was going to hurt sales this year.

  12. I am bitter toward S&W. I am from Commiefornia and they are abandoning us. I have been a faithful S&W customer and they have been screwing us since the micro-stamping law went into effect. Even their wheel guns are falling off the roster and not coming back. Heck even Ruger is keeping the revolvers here. I am becoming a Springfield fan because they have not left us and have way better customer service.

  13. I was going to pickup an m&p sport until I realized they got rid of the 1:8 twist barrel. Still love my m&p 15-22, just wished finding ammo wasn’t such a chore.

    • Every thing you need in a handgun and nothing you don’t need. The one handgun I would never part with is my 10-6.

  14. If they get rid of the lock, they could increase revolver sales overnight. Some gun owners still prefer to own an untarnished, mechanical work of art. And no, “the plug” doesn’t solve the problem.

    • As much as I agree with your sentiments, once a safety feature is added, the only way lawyers in the plaintiff’s bar will allow a safety feature to be removed is by replacing it with another safety feature. It was a mistake for S&W to ever add the “lock” in the first place, because the road to hell is invariably paved with good intentions, and this is one of those.

      • First of all, there is precedent for removing unnecessary safer features. Remington removed the key lock on the 870.
        Second, why not replace the key hole in the frame with a Taurus style lock (in the hammer and not an aesthetic killer) or a Ruger style lock in the grip??
        Third, Why is there such an urge to rationalize bad decisions, bad engineering, and bad taste?

      • Because we live in a litigious country, and until we start thinning the herd of lawyers seeking payouts for darwinian stupidity, we’re going to see companies continue to add prophylactic “features” to guns to “lawyer-proof” them.

        eg, The Savage “Accu-trigger” is a horrible trigger, IMO, but I’m pretty sure Savage isn’t about to remove it from their products any time soon. Same deal with the S&W lock. It’s there, and absent some new design coming along to replace it at the same or lower cost, I don’t see it being removed.

        I happen to agree with you (and others) concerning the ugly aesthetics of the S&W lock. However, since I’m in a business where removing these safety mechanisms could come back to bite me, I never remove them – even at customer request. That customer might not ever make a mistake or sue me, but I have no control over where that gun goes once I’ve worked on it and it could end up in the hands of a sue-happy inDUHvidual years on.

        The liability issue bites me too, you see. I see this issue from the standpoint of the companies because I have to.

        S&W made a mistake adding the lock to their guns in the first place – by doing so, they were making a tacit admission it needed this “feature,” and once that was in place, they bought themselves a future with some manner of locking mechanism on their revolvers. They should never have agreed with the Clinton administration to add this feature, and for those in the gun industry, this is a wonderful object lesson to never, ever seek to appease the gun banners. It won’t work to get rid of them in the long run – adding “safety features” to guns to delay or thwart a legislative or regulatory agenda is like paying ransom to terrorists or pirates: It works for only a short time and later on, they’ll be back with larger demands.

        • I think most people understand the litigious BS that exists.

          The crux of the matter, however, is why does S&W keep the lock in the frame!?

          Just about every manufacture has designed a lock that doesn’t destroy the aesthetics. In a lot of cases, the end user could totally eliminate the lock by replacing lock affected parts with aftermarket parts (I.e mainspring housing on Springfield 1911)

          The situation doea not need to be simply accepted as is. S&W can make a less obtrusive lock!

          As far as thinning out the lawyors that made this mess, Im all for that too.

        • Quite a lot of why gun companies do something “that way” has to do with patents.

          The reason why S&W cylinders revolve “backwards” (out of the frame) is because Colt patented their revolver rolling the cylinder into the frame.

          That patent has been obsolete for decades and decades… and S&W’s still rotate “backwards.”

          I’m sure there’s a patent issue somewhere in S&W’s choice of lock designs.

      • Time for S&W to nut up and remind the stinking lawyers who they work for. I like half cock Marlins, no tang safety Winchesters, and revolvers that have never suffered from acne.

  15. You’d do better to reproduce or link to the actual earnings statement and call transcript by SHWC, and dispense with the nonsense from “businessinsider.com” and their ilk.

    I do quite a bit of investment & trading, and BI is some of the most insipid commentary out there on business and finance. Their commentary (especially on guns) is quite a bit like listening to an eight-year-old lecture his mother where babies come from…

    That said, there’s never been any doubt in anyone’s mind that the surge post-January 2013 wasn’t completely sustainable. You could see this happening months ago when you started to see deals to finance (ie, companies loaning money to customers) purchases of MSR’s. When you see financing for consumer goods appear, you know you’re in a bubble environment.

    S&W could keep the MSR arm, but I think they should concentrate much more on products that we can’t get from anyone else, ie, nice, high quality revolvers. This obsession with black cheez-whiz and aluminum won’t last forever, it’s just a passing fad. Revolvers made of real steel (blued or stainless), however, are timeless and are highly functional products that simply work when they need to.

    The other thing S&W should ramp up is production of their target pistols – the Model 41 and 52. There’s no reason why they should be leaving that market to either highly inferior pistols (eg, a Ruger MkIII or MkII) or the much more costly European pistols. The 41 is a timeless target pistol, and the 52 is the target pistol for people who like to reload centerfire match ammo.

    • Respectfully, you’re suggesting they concentrate on a niche market and a tiny niche market in order to increase sales. Owning 100% of 1% amounts to diddly squat. And “Wall Street” be dammed. Estrogen driven nonsense.

      “MSR” and 9mm/45 autos will continue to dominate firearms sales for political reasons. And another “boom” is only one more Obuma tantrum or “shooting tragedy” away.

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