Smith & Wesson stock soars after favorable earnings report

Investors flocked to Smith & Wesson last week after the gun maker’s parent company, American Outdoor Brands, reported an increase in earnings, spiking stock prices by nearly half.

Shares for AOBC traded at $14.03 by the end of day Friday, a 43.6 increase in the 24 hours following the company’s report of 7 percent revenue growth during its first quarter ending July 31.

The upswing follows conservative guidance issued from the company over the summer as the results of its “challenging” fiscal year — which ended April 30 — became public. Now, instead of a forecast of tepid gun sales for the remainder of the year, top executives sound more optimistic — even revising its full-year sales projections upwards to $630 million.

“We are pleased with our operational and financial results for the first quarter,” said Chief Executive Officer James Debney in a news release Thursday. “Our increased profitability was driven by consumer preference for our new products, reduced promotions versus the prior year, and solid progress on a number of our expense reduction initiatives.”

Revenue for the company’s gun sales increased 5.9 percent. Debney told investors Thursday long gun sales spiked nearly 38 percent. The outdoors segment — which includes brands such as Bubba Blade, Old Timer and Crimson Trace, among others — grew nearly 15 percent, according to filings.

Analysts praised AOBC for diversifying into the outdoor market and for stabilizing its gun sales after nearly two years of unpredictability following the election. Some, however, described the price swing as an “overreaction” and “too rich.”

Still, the growing confidence in the firearms market influenced share prices for Vista Outdoor and Sturm, Ruger and Company, increasing more than 5 percent and 7 percent, respectively, as of Friday.

Read More On:

Latest Reviews

  • Gear Review: Sig Sauer Tango 6T 1-6

    Sig Sauer has long been a big name in the firearms industry, so it came as no surprise several years ago when Sig filled out its repertoire with its own optics line. Today, we’re looking at the Tango 6T, a 1-6 low power variable optic.

    Read More
  • First Look: Hornady 6mm ARC

    Hornady brought another impressive project to the shooting public in 2020 with the introduction of the 6mm Advanced Rifle Cartridge.

    Read More
  • Gear Review: Sig Kilo 3000 BDX Binos

    Featuring the company's BDX technology, the Kilo 3000 sits at the tops of Sig Sauer’s optics line bringing binoculars and laser rangefinders into one unit. 

    Read More
  • Scope Review: Leupold VX-3i CDS-ZL

    The new-for-2020, VX-3i CDS-ZL riflescope, is an American-made optic that can be customized for your exact specifications, is easy to use and is backed with a Lifetime Guarantee.

    Read More

Loading