Smith & Wesson earnings dip, amid borrowing for relocation to Tennessee

Smith & Wesson earnings dip, amid borrowing for relocation to Tennessee

 Smith & Wesson Brands, the gunmaker that now is still based in Springfield, said sales fell 27.4 percent in its most recent quarter. Sales amounted to $129 million, down $48.7 million from the same three months a year ago.

But the $129 million in net sales for the three months that ended Jan. 31 were up $1.6 million, or 1.3%, from November, December and January of 2020, the last pre-pandemic comparable third quarter.

Gun sales spiked during COVID-19, with buyers spooked about perceived risk of civic unrest, flush with relief cash and using time during lockdown to pursue outdoor sports.

In its earnings release Thursday, Smith & Wesson reported profits of $11.1 million, or 24 cents per share, compared with $30.5 million, or 65 cents per diluted share, for the comparable quarter last year, and $4.2 million, or 8 cents per diluted share, for the comparable quarter in fiscal 2020.

Wall Street’s consensus earnings estimate for the period was 23 cents a share and the consensus revenue estimate is $125.35 million.

Smith & Wesson stock, SWBI on Nasdaq, traded at $10.39 a share at the close of trading Thursday. That’s down 19 cents, or 1.8 percent, from $10.58 at the close of Wednesday’s trading. The stock traded at $16.31 a share a year ago in March 2022.

Mark Smith, president and CEO, said the company is pleased with the results, which he said show gains over pre-pandemic levels.

He said the company has adjusted its operations “to fundamentally transform our business model as it relates to product mix and pricing.”

Smith said the firearms market is healthy and has grown beyond what he termed “a large and loyal base of core consumers.”

In 2021, Smith & Wesson announced it was moving its headquarters, distribution and plastics manufacturing and assembly work on semi-automatic handguns and semi-automatic military-style rifles to Maryville, Tennessee.

At the time, Smith & Wesson said the move was forced by pending Massachusetts legislation, a bill that still has not passed, that would have banned Smith & Wesson from manufacturing firearms in Massachusetts that cannot be sold here under state law.

Tennessee officials are providing $9 million for the new $125 million plant, expected to open late this year.

Smith & Wesson plans to move 750 jobs to Tennessee from Springfield and sites in Missouri and Connecticut.

About two-thirds of the Springfield jobs being moved, some 400, are blue-collar.

About 1,000 jobs will remain in Springfield. Machining work and metal forging — two equipment-intensive operations with highly paid employees — will remain in Springfield, as will work assembling revolvers.

Deana McPherson, executive vice president and chief financial officer, said in a release that the company has borrowed to underwrite the move to Tennessee.

“We expect that we will be able to repay this balance by the time the relocation is complete, if not sooner,” McPherson said.

The company reports $24.8 million in loans not on its books a year ago.


© 2023 Advance Local Media LLC

Distributed by Tribune Content Agency, LLC.


Spread the love