Smith & Wesson Brands (SWBI.US), US gun maker, trades over 6% lower today following the release of a disappointing earnings report for fiscal-Q1 2023 (calendar May-July quarter). Adjusted EPS from continuing operations reached $0.11 (exp. $0.23) while net sales from continuing operations came in at $84.4 million (exp. $129.9 million).
Although results were weaker than a year-ago, company's executives said they are pleased with them as gross margin came in at 37.3% - more or less in-line with fiscal-Q1 2020 (calendar May-June 2019). Management of Smith & Wesson noted that the retail boom in firearm sales that could be observed over the past 2 years is fading and demand returns to pre-pandemic patterns. Nevertheless, company said that it is pleased with net profitability exceeding pre-pandemic levels in both relative and absolute dollar terms and expects the remainder of the year to be strong as well. However, those comments failed to ease investors' concerns as one can see on the chart above.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
Shares of Smith & Wesson Brands (SWBI.US) plunged below mid-July low at $12.75 and reached the lowest level since June 2020. Company acknowledged that the retail boom in firearm sales of the past 2 years is ending but expects profitability to remain above pre-pandemic levels. Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
