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!