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Smith & Wesson Stock Sinks as It Says Inflation Is Hurting Firearms Sales
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Main points
- Smith & Wesson reported a decline in second-quarter adjusted net income as inflation slowed demand for firearms.
- The gun maker said consumers are more cautious about discretionary spending than the company expected.
- Smith & Wesson explained that due to weak consumer demand, the company has lowered its forecast for the second half of the fiscal year and expects a significant decline in sales in the current quarter.
Smith & Wesson brand (SWBI) shares plunged nearly 20% on Friday, a day after the company warned that inflation was reducing gun sales and lowered guidance.
The firearms maker reports adjusted second-quarter fiscal 2025 results net income $4.8 million, or $0.11 per share, down from $6.5 million, or $0.14 per share, a year ago. Revenue increased 3.8% year over year to $129.7 million.
Chief Executive Officer (CEO) Mark Smith said the results were “below our expectations as overall demand for firearms normalized towards the end of the quarter” and the main reason “remains inflation”. Smith added, “Consumer caution about discretionary spending, which we have observed in recent quarters, was more pronounced in the second quarter than we expected.”
Chief Financial Officer (CFO) Deana McPherson explained that Smith & Wesson lowered its expectations for the second half of the year based on “softer demand trends.” “For the third quarter, we expect top line This is approximately 10-15% less than in fiscal year 2024. ”
The news sent Smith & Wesson shares into negative territory this year, to their lowest level since early 2023.
trading view
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