A brief rush to gun stores after a wave of mass shootings sparked nationwide protests wasn't enough to overcome a lingering sales slump for the maker of Smith & Wesson firearms.
Renewed calls for greater gun control this year motivated buyers who worried that new laws might limit their access to weapons. That anxiety quickly subsided, along with sales at American Outdoor Brands Corp., which on Wednesday reported a 25 percent decline in fiscal fourth-quarter revenue compared with last year.
With Republicans controlling both the executive and legislative branches of government making new gun restrictions less likely, the company cut its profit forecast March 1 and warned that consumer demand had fallen to "new, lower levels."
That sentiment reversed course later in the month, when federal data pointed to a rise in sales after a shooting at Marjory Stoneman Douglas High School in Florida killed 17 students and staff. Another high school shooting in Texas claimed 10 more lives at the end of May.
The FBI's National Instant Criminal Background Check System, a barometer for gun purchases, showed a 3 percent increase nationwide in February for long-gun checks, which include shotguns and military-style rifles. In Florida, the category soared 12.6 percent compared with a year earlier. The numbers jumped even higher in March, with long-gun checks rising 17.3 percent.
The enthusiasm was short-lived, as background checks fell in April and May, supporting the warning from American Outdoor CEO James Debney in March that the gun-maker could "deliver flattish revenues" over the next 12 to 18 months.
American Outdoor reported adjusted earnings of 24 cents a share for the quarter ended April 30, compared with 57 cents a share a year earlier. Analysts had expected 10 cents, based on the average of estimates compiled by Bloomberg. Revenue declined to $172 million, better than analysts' expectations of $165.6 million.
Business on 06/21/2018