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Shares of Smith & Wesson Brands Inc. were down Friday morning after the company said demand for its guns returned to pre-pandemic levels.
The firearms maker on Thursday had reported net sales to $84.4 million for its fiscal first quarter, a decrease of 69% from the same time last year. Smith & Wesson Chief Executive Officer Mark Smith blamed the “challenging” quarter on the return to normal demand levels and the company needing to correct inventory levels.
“The industry experienced our first normal summer slowdown in three years,” Smith said in a press release. Additionally, he said manufacturer orders were “artificially depressed” as the company’s partners sold through existing inventories.
Demand for guns had surged in late 2021 and early 2022 amid the pandemic and societal civil unrest related to police killings of unarmed Black people and the presidential election.
Analysts agreed with Smith’s assessment of the normalization of firearm demand.
“Although disappointed with results that missed our estimates, we think the company remains disciplined in its approach to long-term growth and prudent management of channel inventory,” a Lake Street analyst said in a note.
Smith & Wesson has also been the subject of congressional scrutiny after lawmakers criticized the way gun manufacturers have marketed their products, especially to young men.
For its fiscal quarter ended July 31, Smith & Wesson reported a net income of $3.3 million, dropping from $76.9 million in the year-ago period.
Smith & Wesson’s stock was down about 6% in morning trading. The company’s shares were down about 25% so far this year as of Thursday’s close.