Friday morning saw a decline in Smith & Wesson Brands Inc. shares after the firm reported that demand for its firearms had reached pre-pandemic levels.
The manufacturer of firearms announced net sales of $84.4 million on Thursday, a 69% drop from the same period previous year. Chief Executive Officer of Smith & Wesson Mark Smith attributed the “difficult” quarter to the restoration of regular demand levels and the necessity for the business to reduce inventory levels.
Smith stated in a press statement that “the industry saw our first typical summer slowdown in three years.” In addition, he claimed that manufacturer orders had been “artificially lowered” as a result of the partners’ sales of the company’s stock.
Due to the epidemic, societal instability caused by police shootings of unarmed Black people, and the presidential election, demand for guns spiked in late 2021 and early 2022.
Smith’s estimate of the normalization of weapon demand was supported by analysts.
Although we were disappointed by the results, which fell short of our expectations, a Lake Street analyst wrote in a note that “the company remains disciplined in its commitment to long-term growth and cautious management of channel inventory.”
Congress has also scrutinized Smith & Wesson after criticizing the way gun manufacturers have promoted their goods, particularly to young males.
Smith & Wesson reported a net income of $3.3 million for the fiscal quarter that ended on July 31 as opposed to $76.9 million in the corresponding quarter last year.
In early trade, Smith & Wesson’s shares were down about 6%. As of Thursday’s close, the company’s shares had lost nearly 25% of their value this year.