An attendee walks through a 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 firearms maker on Thursday reported net sales of $84.4 million for its fiscal first quarter, down 69% from the same period last year. Smith & Wesson Chief Executive Officer Mark Smith blamed the “challenging” quarter on a return to normal demand levels and the need for the company to correct inventory levels.
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“The industry experienced our first general summer recession in three years,” Smith said in a press release:, Additionally, he said the manufacturer’s orders were “artificially depressed” because the company’s partners sold through existing inventories.
Demand for guns increased in late 2021 and early 2022 amid pandemic and social civil unrest related to police killings of unarmed black people and presidential elections.
Analysts agreed with Smith’s assessment of the generalization of demand for firearms.
“While disappointed by results that missed our estimates, we believe 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 market their products, particularly to young men.
For its fiscal quarter ended July 31, Smith & Wesson reported net income of $3.3 million, up from $76.9 million in the year-ago period.
Smith & Wesson’s stock was down nearly 6% in morning trading. The company’s shares have fallen nearly 25 per cent so far this year till Thursday’s close.