Despite volatility in stocks since Election Day, Smith & Wesson says they aren’t concerned that Donald Trump’s presidential win will negatively impact business.
President and CEO of Smith & Wesson James Debney told investors during a conference call that firearm sales are expected to remain steady through the rest of the fiscal year. The Massachusetts-based gun maker’s confidence in sales is so high the company increased their anticipated earnings for the fiscal year by $20 million.
Debney said though panic buying has slowed since the election, other demographics are expected to fill in the gap left behind by fearful consumers.
“We’re still thinking about it growing in single digit to, say, mid-single digit to high single digit in a normalized environment, so an environment free of events that may spur consumer buying,” Debney told investors during Thursday’s meeting. “We see the demographics of the firearm consumer is very different now … younger people from more urban areas versus suburban areas and many more women than ever before taking an interest in the shooting sports, first-time buyers significantly up, very strong trend for conceal carry continues.”
He pointed to record breaking Black Friday sales as evidence that loyal gun owners aren’t going anywhere.
“Certainly Black Friday is a good indicator,” Debney said. “So pleased to see the consumer for firearms is still out there strongly on Back Friday, looking for a deal. As we expect for a few years now, it’s obvious that firearms have become mainstream in terms of entering the basket of goods the consumers expect to see a deal on when they are shopping at retail on Black Friday.”
Concerns over the well-being of the firearms industry were initially raised after several Ruger, Smith & Wesson and Vista Outdoors’ stocks tumbled in the days after Trump was elected President. In the weeks since Nov. 8, Ruger and Smith & Wesson stocks rebounded, but nowhere near pre-election day numbers.
Despite lagging stocks, Smith & Wesson saw an uptick in revenue in their second quarter — largely driven by their successful firearms division. The company pulled in over $233.5 million in net sales with over $185 million coming from gun sales alone. Debney said the company expects the firearms division to continue bringing in revenue for the company.
Though Smith & Wesson announced a refocus in strategy towards the rugged, outdoor market Debney said guns continue to be the bedrock of the company.
“Our family of brands participates in almost every firearm category, and our team is focused intently on maintaining a robust new product pipeline that has continued to fuel our organic growth and profitability year after year,” explained Debney. “That said, our strength in firearms has not only delivered growth but it has served as a strong core business and a solid foundation from which we are pursuing a broader and exciting strategy.”
While Smith & Wesson Holding Corp. will see an upcoming name change to reflect the evolving mission to serve both firearms consumers as well as outdoor enthusiasts, the manufacturer intends to continue researching and analyzing gun owners in order to meet their wants and needs.
The company is set to premiere 100 new products, including a new M&P branded handgun, at SHOT Show in Las Vegas in January.
“We are excited about the future,” said Debney. “We’ve got a lot of new products coming in all parts of the business.”
He confidently added, “The firearms business remains strong.”