Firearm manufacturer Smith & Wesson’s sales were down 47% in the most recent quarter, a drop the company blamed Tuesday on inflation, the cost of home heating and rising interest rates.
Smith & Wesson reported $121 million in sales Tuesday for the three months that ended Oct. 31. That was a decrease of $109.4 million, or 47.5%, from this time last year when it was $230 million.
But last year, pandemic-era buyers were scooping up firearms. Looking before the pandemic, the results announced Tuesday are $7.3 million, or 6.4%, higher than the comparable time period in 2019.
Smith & Wesson said it earned $9.6 million, or 21 cents a share in the quarter compared with $50.9 million, or $1.05 a share, in the same time period last year.
Heading into the announcement, Wall Street’s consensus estimate of the company’s earnings was 44 cents a share. The company’s stock — trading as SWBI on the NASDAQ — was down 7.9% in after hours trading to $10.90 a share.
Smith & Wesson was trading at $11.99 a share Tuesday, down 8 cents or 0.62% on the day. The stock’s 52-week high is 18.94.
Mark Smith, president and CEO said the company preformed well given factors outside its control.
“With firearm demand continuing to normalize, our second quarter results once again demonstrated the significant progress we’ve made over the past several years in creating a highly adaptive and robust business model that consistently delivers strong profitability, regardless of market conditions. Consumer demand for firearms was significantly down from a year earlier, coinciding with a broader consumer slowdown driven by persistently high inflation, the beginning of the winter heating season across the northern half of the country, and rising interest rates.,” he said in a news release. “Nonetheless, compared to the second quarter of fiscal 2020, our current quarter results reflected a significant increase in profitability. While fiscal 2023 continues to be a year of recalibration and adjustment for our industry and Smith & Wesson, we expect to remain highly profitable and continue delivering on our commitments to customers, employees, and stockholders well into the future.”
The board of directors has authorized a 10-cent-per-share quarterly dividend.
In 2021, Smith & Wesson announced it was moving its headquarters, distribution and plastics manufacturing and assembly work on semi automatic handguns and semi-automatic military-style rifles to Maryville, Tennessee. Smith & Wesson said the move was forced by pending Massachusetts legislation, a bill that still has not passed, that would have banned Smith & Wesson from manufacturing firearms in Massachusetts that cannot be sold here under state law.
Work on the company’s new headquarters and factory in Tennessee is continuing with production expected to begin there in early summer.
The company will retain 1,000 jobs and metal cutting and precision manufacturing operations at its 2100 Roosevelt Ave. plant in Springfield. Smith & Wesson will lay off 550 local workers, moving those jobs to gun-friendly Tennessee. It’ll close a plastics factory in Deep River, Connecticut, and a distribution center in Missouri.
Back in September, Smith & Wesson said sales fell to the lowest level in 13 years.
Sales in that quarter were $84.4 million, a decrease of $190.2 million or 69.3% from the same time period in 2021, Smith & Wesson said
The gun industry is predicting a robust holiday season.
The National Shooting Sports Foundation said the FBI’s National Instant Criminal Background Checks System completed 711,372 background checks during the week leading up to and including Black Friday. The FBI’s background check system recorded 192,749 background checks on Black Friday alone, up 2.8% from Black Friday 2021.
The industry often uses background check numbers as a proxy for sales.
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