SPRINGFIELD – Smith & Wesson's parent company, American Outdoor Brands, said its third-quarter net sales decreased 36.4 percent compared to last year, when personal safety concerns and nervousness prior to the elections caused consumers to buy weapons.
Sales were $ 148.4 million for the quarter ending October 31. The firearms giant based in Springfield announced on Thursday 19659002. That is within the range of what the administration told investors, but disappointing compared to the same three months of 2016, when net sales were $ 233.5 millions.
Adjusted for expenses related to the purchase of Gemini Technologies, a manufacturer of sound suppressors for firearms, American Outdoor Brands reported a net profit of $ 6.3 million for the quarter. That's 11 cents per share, compared to $ 39.1 million, or 68 cents per share diluted during the same three months in 2016.
The shares of American Outdoor Brands, which are listed under the AOBC symbol in NASDQ, are quoted at $ 14.3 per share at the end of the day on Thursday, fell 69 cents per share or 4.89 percent on the day.
The stock is well above the last year of $ 24.49 per share registered in June 2017.
The figures for a year ago also made adjustments to the company's previous purchases. In a press release, James Debney, president and CEO of American Outdoor Brands Corp. said the company faces "challenging market conditions."
"The lower shipments in our firearms business reflected a significant reduction in the orders of wholesalers and retailers compared to the previous year, and were partially offset by higher revenues in our accessory and outdoor products business "Debney said. "Total revenue for the quarter faced a challenging comparison to last year, when we believe that strong consumer demand was driven by personal security concerns and pre-election fears of increased firearms legislation."
He said the company reduced production this fall.
"For the second half of fiscal year 2018, our focus remains on ensuring that our internal manufacturing resources are aligned with demand," he said. "In addition, we intend to present several exciting new products, and execute long-term organic growth initiatives that support our vision of being the leading supplier of quality products to enthusiasts of shooting, hunting and aggressive outdoor."
Matt Buckingham, president of the Smith & Wesson firearms division, resigned in November, according to Smith & Wesson field documents with the federal Securities Market Commission.
The shares of Smith & Wesson changed their name to US outdoor brands in December 2017 to reflect their efforts to diversify into camping equipment, knives, blacksmithing and weapon accessories such as telescopes and sights, and camping equipment.
Smith & Wesson has 1,758 full-time employees, according to its annual report. About 1,462 work in manufacturing, and most of those workers are in the company's factory on Roosevelt Avenue in Springfield.
In general, the demand for weapons falls when a Republican is in the White House. Having a democrat in charge makes gun enthusiasts fear the new regulations, so they stock up.
But there is an indication that demand is increasing. The FBI processed 203,086 requests for background checks for weapons purchases on the Friday after Thanksgiving, the highest daily total to date. Background checks are a general indicator of the demand for firearms, but there is no one-to-one relationship between checks and sales.