Shares of Smith & Wesson (SWHC) have gained 17% today after the gun maker reported better-then-forecast earnings.
Bloomberg News has the details on Smith & Wesson’s results:
Earnings per share in the quarter ended Jan. 31, rose 35 percent to 35 cents, the Springfield, Massachusetts company said in a statement yesterday. That beat the 29 cent average estimate of eight analysts in a Bloomberg survey. The company said it estimates full-year earnings per share of between $1.39 and $1.42, increasing its previous estimate of between $1.30 and $1.35.
Sales of handguns, which include the company's popular M&P pistols, grew 30 percent as the company sought to increase market share, Chief Executive Officer James Debney said in a conference call yesterday. Total revenue grew 7 percent to $145.9 million, surpassing estimates of 142.9 million. Income from continuing operations rose to $20.1 million from $17.5 million.
Wedbush’s Rommel Dionisio and Alicia Reese fret about Smith & Wesson’s retail-sales trends:
In the wake of the Newtown tragedy in Dec. 2012, widespread consumer fears of tightened gun control pulled forward industry demand in early 2013. Now facing unusually difficult y/y comparisons, retail sales trends the past several months have been down significantly y/y (see Figure 1), a trend which should continue through at least May or June. We also note from our recent channel checks that overall retail inventories, which were in short supply last spring, have largely normalized…
S&W's recent decision to stop selling its most important product line of M&P pistols
in California, effectively shutting down much of its total sales in this major market
rather than comply with the state's new microstamping law, will likely begin to
impact results in FY15.
Barron’s offers its take here.
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