Smith & Wesson meets raised expectations in Q4 as sales normalize

Sales performed in line with how Smith & Wesson Holding Corp. management projected for fiscal year 2015 with gun sales shifting back to seasonal patterns.

With a surplus of inventory leftover from a spike in sales in 2013, the Massachusetts gun maker has been laying groundwork to stay in the running.

According to last week’s filing with the Securities and Exchange Commission, total sales for the fourth quarter set a record at $181 million, an increase of 6.2 percent. Of that, firearm sales accounted for $166.4 million.

Although firearm sales were down, the total was offset by $14.6 million in accessory sales pulled in through the company’s new acquisition Battenfeld Technologies, Inc., which finalized in December.

“The very slight decline in firearms revenue, which was anticipated, was more than offset by sales in our new accessories division,” Smith & Wesson Chief Executive Officer James Debney said during a conference call with investors Thursday.

Handgun sales accounted for $120.7 million, down 2.8 percent, and long gun sales made up $34.2 million, up 5 percent.

Sales for the year totaled $551.9 million, down 11.9 percent from last year. Firearms made up $531.2 million of the total and accessories mad up $20.6 million.

In April, the company projected earning between between $546 million and $555 million in total sales.

Profit for the fiscal year totaled $49.6 million, down by roughly $40 million from last year.

As for inventory, the company reduced its firearm inventory over the past two quarters by $31.8 million, down to a balance of $67.4 million.

“A few quarters ago, we set a goal to reduce inventory in our firearm division to $75 million by the end of FY15, and we greatly exceeded that goal,” said Jeff Buchanan, the company’s chief financial officer.

Moving forward, Smith & Wesson expects revenue for fiscal year 2016 to be between $605 million and $615 million.