Smith & Wesson Gun Demand Blows Profits, Sales, and Guidance Away

Before you go, we thought you'd like these...
Before you go close icon

146821322You have already seen the positive earnings report from Sturm, Ruger & Co. (NYSE: RGR) and positive comments from sporting goods stores about gun and ammo sales. Now we have Smith & Wesson Holding Corp. (NASDAQ: SWHC) shooting the lights out on its earnings report. If you want to know what the specter of gun control does, imagine a 38.8% sales gain year over year! That is what the gun-maker reported in its fiscal third quarter.

Net sales came to $136.2 million and net income from continued operations was $17.5 million or $0.26 in earnings per share. Thomson Reuters had estimates of $0.23 EPS and $133.7 million in sales.

The company also raised its guidance for fiscal 2013 net sales from continuing operations to a range of $575 million to $580 million. Thomson Reuters has estimates of $561.3 million in sales.

Demand is helping margins as well: Gross profit for the third quarter was 36.8% of net sales at $50.1 million compared with gross profit of 30.6% of net sales or $30.0 million a year earlier. At the end of the quarter, S&W had no borrowings under its credit facility and it ended the quarter with a cash balance of $62.0 million. It even spent some $20 million buying back shares of its common stock in the quarter.

We were not expecting that the numbers would have a profound market move in either direction. After all, the demand and shortages are very well known. That being said, Smith & Wesson shares were down about 0.6% at $10.22 today and the stock is down about 1% or so in the after-hours.

Our take is rather simple: imagine how much the gun industry could have made if they were actually able to even be close to meeting the demand out there right now.

Filed under: 24/7 Wall St. Wire, Consumer Goods, Consumer Product, Earnings Tagged: featured, RGR, SWHC
Read Full Story

People are Reading