Smith & Wesson lowers expectations after another sales decline

The Smith & Wesson booth during SHOT Show 2017 in Las Vegas. (Photo: Daniel Terrill/Guns.com)

Smith & Wesson issued a conservative outlook for revenue in the coming year following a fourth quarter sales decline of 25 percent.

The gun maker’s “challenging” fiscal year came to an end April 30 with overall net sales down nearly 33 percent to just under $607 million — and the next 12 months look worse, Chief Executive Officer James Debney told investors Wednesday.

“We don’t see that as a long term dynamic. We think the market will return to growth,” he said. “But when you do come out of periods of very robust buying, and we’ve certainly seen that over the last few years, you can expect a correction. And that can take up to two years.”

Debney said bankruptcies and consolidations across the industry will continue “driving uncertainty for some time.” He expects revenues of no more than $600 million in 2019. “I believe as we enter the next fiscal year, so what would be 2020 for us, then that’s when the market we anticipate would be returning to that longer term-growth,” he said. “Now obviously this is all in the absence of any fear based buying, which we know can occur from time-to-time. But we certainly see a good and viable market for firearms here with the consumer in the U.S.”

Share prices for Smith & Wesson parent company American Outdoor Brands spiked 6 percent Wednesday, despite the downturn in sales — a fact the gun maker balanced with lowered levels of production and the elimination of 200 positions in 2017.

“Overall, our long-term strategy remains focused on being the leading provider of quality products with the shooting, hunting and rugged outdoor enthusiasts,” Debney said Wednesday, reiterating a similar sentiment he shared with investors in March. “Continued growth in our Outdoor Products & Accessories segment will help us better balance our overall revenue by somewhat mitigating the volatility we have experienced in recent years in our firearms business.”