An attendee walks past the Smith & Wesson booth at the NRA’s annual meeting.
Shares of Smith & Wesson Brands Inc. fell Friday morning after the company said demand for its guns had returned to pre-pandemic levels.
The weapons maker on Thursday reported net sales of $84.4 million for its fiscal first quarter, down 69 percent from the same time last year. Smith & Wesson CEO Mark Smith blamed the “challenging” quarter on demand returning to normal levels and the company’s need to adjust inventory levels.
“The industry has experienced its first normal summer deceleration in three years” Smith said in a press release. Additionally, he said, manufacturers’ orders were “artificially falling” as the company’s partners sold through existing inventory.
Demand for guns increased in late 2021 and early 2022 amid the pandemic and social unrest related to police killings of unarmed black people and the presidential election.
Analysts agree with Smith’s assessment of normalizing arms demand.
“While disappointed with the results that fell short of our estimates, we think the company remains disciplined in its long-term growth approach and prudent management of channel inventory,” said an analyst. Lake Street analyst said in a note.
Smith & Wesson also the subject of congressional oversight after lawmakers criticized the way gun manufacturers market their products, especially towards young men.
For the fiscal quarter ended July 31, Smith & Wesson reported net income of $3.3 million, down from $76.9 million in the same period a year earlier.
Shares of Smith & Wesson were down about 6% in morning trading. The company’s shares were down about 25% so far this year through the end of Thursday.
