It’s been a week of surprises in the financial markets where guns are concerned. First there was Dick’s Sporting Goods stock, which fell about 10% due to an unexpected drop in same-store sales. The pro-gun control retailer attributed its poor results to the post-Parkland moves they made, raising the minimum age to buy a gun and discontinuing scary black rifle sales in their Dick’s and Field & Stream stores.
But that doesn’t mean that Americans have lost their taste for firearms and all things ballistic. To the contrary . . .
Smith & Wesson parent American Outdoor Brands stunned Wall Street on Friday with unexpectedly strong quarterly results and a brighter financial outlook, sending its stock soaring 44 percent.
The Springfield, Mass., company said profits surged as it cut costs and inventory, even as demand for new gun models goosed sales. The news, which likewise gave a 7.3 percent boost to shares of archrival Sturm Ruger & Co., raised investor hopes that the industry is finally digging itself out of a two-year slump — and piles of unsold guns.
That’s really strange, because we saw a brace of new media reports this week — apropos of nothing —
celebrating talking about the “Trump slump” and the allegedly tough time gun makers are still having almost two years after the presidential election. (See examples here, here, here and here.)
But then along comes Smith & Wesson and bursts the bad new bubble.
…Chief Executive James Debney cited “consumer preference for our new products.”
Those include Smith & Wesson’s easy-to-shoot M&P 380 Shield EZ automatic pistol, its versatile SW22 Victory semi-automatic pistol and a relaunched revolver called Model 19 that was first produced by the company in 1955. Long-range rifles are moving briskly, the company said.
American Outdoor swung to a $7.6 million profit, versus a loss of $2.2 million, as revenue jumped 7.6 percent, to $138.8 million, beating expectations of $134.5 million. The company hiked its outlook for sales and profits for the rest of 2018.
Nationwide background checks for gun purchases, an indicator of gun sales, totaled 1.84 million in July, are up 5.3 percent from a year ago, but down 16.5 percent from July 2016, according to the FBI.
Have a safe and happy holiday weekend.