Smith & Wesson Shares Collapse After Slashing Its Sales Expectations (SWHC)

August 26, 2014 at 17:04 PM EDT

Smith & Wesson gun

Gunmaker Smith & Wesson was down more than 11% in after hours trading on Tuesday after the company slashed its full-year sales expectations for the second time in two months.

On Tuesday, the company sales are now expected to be $530-$540 million, well short of current estimates for around $593 million, and also sharply lower than the $585-$600 million expectations the company laid out in June.

The company also said that for its fiscal first quarter ended July 31, Smith & Wesson reported revenue of $131.9 million, lower than the $133.4 expected by analysts, and down $39.2 million from last year.

The company said lower sales of long guns, including modern sporting rifles, drove 87% of this first quarter decline.

Gross profit in the second quarter was $49.1 million, down from $72.8 million in the prior year period, and the company earned $0.26 per share, slightly better than the $0.25 expected by Wall Street.

Smith & Wesson said, however, that handgun sales showed, "continued consumer demand for the company's small concealed carry polymer pistols and revolvers."

"We believe that the current environment reflects high inventories industry-wide resulting from channel replenishment that occurred following an earlier surge in consumer buying," Smith & Wesson CEO James Debney said in a statement. "That environment, combined with typical seasonality that slows consumer buying activity during the summer, is causing us to lower our financial outlook for fiscal 2015."

Debney added that, "We expect the industry will continue to deliver growth over the long term."

See Also: