If you combined the entire U.S. firearms industry into one company, its turnover wouldn’t match the money generated by any one of the top ten companies on the Fortune 500 list. If you want to invest your hard-earned money in a publicly traded gunmaker, Smith & Wesson and Sturm Ruger are just about it. So those of us looking to gauge the health of the American firearm biz look at their reports with keen interest. “Smith & Wesson ignited a selloff on Friday after reporting a slight drop in fourth-quarter earnings and a disappointing outlook for the new fiscal year,” foxbusiness.com reports. Yes, well . . .
the slight drop in earnings still represents a significant gain from years past, when the Springfield-based gunmaker was on the ropes (largely thanks to its bone-headed decision to buy a security company and its inability to shed same). And the “disappointing outlook” needs a little perspective.
National Instant Criminal Background Check System inquiries—adjusted by the National Shooting Sports Foundation to exclude checks related to permit applications—declined 16.6% in April to 988,726. But the total was still good enough for the second-highest April on record.
After Thursday’s closing bell, Smith & Wesson said it earned $25.1 million, or 44 cents a share, in the period ended April 30. The Springfield, Mass., company reported a profit of $25.2 million, or 38 cents a share, in the year-ago period.
Net sales fell 4.6% to $170.4 million. Gross margin widened to 40.9% from 38.3%. Excluding Walther firearm sales, sales were down 1.5%. Smith & Wesson phased out a distribution agreement with the German gun manufacturer in 2013.
The quarterly results beat Wall Street expectations. Analysts were looking for per-share earnings of 39 cents and revenue of $163.55 million.
Smith & Wesson, which posted 38% sales growth in same period last year, said lower rifle sales offset strong demand for handguns. The company has focused on grabbing a bigger share of the market for polymer pistols, launching new versions of its M&P handguns in recent years.
In May, rival gun maker Sturm Ruger (RGR) reported a 9% increase in total sales during the company’s fiscal first quarter.
Smith & Wesson chief executive James Debney said the company booked record sales, profits and margins in the just-completed year.
In other words, what do I got to do to make you guys happy? Help Hillary get elected? Just kidding. I hope.
[h/t TP]