Smith & Wesson stock drops after fiscal Q2 earnings miss expectations on lower demand

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Smith & Wesson Brands Inc. SWBI, -2.16% stock fell more than 6% in the extended session Tuesday after the firearms manufacturer missed Wall Street expectations for its fiscal second-quarter results, with sales dropping significantly year-on-year on weakened demand. Smith & Wesson earned $9.6 million, or 21 cents a share, in the quarter, compared with $50.9 million, or $1.05 a share, in the year-ago period. Adjusted for one-time items, Smith & Wesson earned 26 cents a share. Net sales dropped 47% to $121 million, from $230 million a year ago. Consensus on FactSet called for earnings of 44 cents a share on revenue of $145 million in the quarter. Firearm demand continues “to normalize” and was “significantly down” from a year earlier, Chief Executive Mark Smith said in a statement. The cooling demand is “coinciding with a broader consumer slowdown driven by persistently high inflation, the beginning of the winter heating season across the northern half of the country, and rising interest rates,” Smith said. “While fiscal 2023 continues to be a year of recalibration and adjustment for our industry and Smith & Wesson, we expect to remain highly profitable and continue delivering on our commitments to customers, employees, and stockholders well into the future,” he said. Chief Financial Officer Deana McPherson added that sales were impacted by an “ongoing inventory correction combined with the impact of promotional activity by our competitors and the trading down by consumers to lower priced products.” Shares of Smith & Wesson ended the regular trading day down 2.2%.

This article was originally published by Marketwatch.com. Read the original article here.

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