Smith & Wesson’s quarterly firearm revenues more than doubled, reflecting an election-year boom in US gun sales during the coronavirus pandemic and civil unrest.
The company’s firearms unit registered $230m in gross sales for the quarter that ended in July, a 141 per cent increase compared with a year ago.
Overall net sales totalled $278m, up from $123.7m a year earlier and well ahead of analysts’ forecast for $195m.
Gun sales have historically trended upwards during presidential election years, as buyers hedge against potential action in Washington to tighten restrictions on sales. Demand has also risen in response to civil unrest in major US cities this summer, as well as uncertainty related to the pandemic and the economic turmoil that ensued, industry executives have said.
Mark Smith, Smith & Wesson’s chief executive, said the group’s “record revenue and unit sales during the quarter demonstrates our ability to rapidly respond to increased demand”.
Background checks processed by the FBI — used as a gauge of US gun sales — are on pace to surpass the record high of 28.4m set last year. Data published this week show there were 3.1m checks in August, bringing the annual tally to 25.9m. Background checks jumped 51 per cent year-on-year in August to 1.7m when adjusted by the National Shooting Sports Foundation, which excludes non-purchasing activity such as permit applications.
The NSSF, a trade group, also estimated last month that almost 5m Americans had purchased a firearm this year for the first time, based on a survey of retailers who reported that 40 per cent of their sales were to customers who had never owned a gun.
The gun maker Sturm Ruger in July estimated that sales of its products from distributors to retailers jumped 47 per cent year-on-year in the first half of 2020. Chief executive Christopher Killoy said at the time that consumer demand began to “surge” late in the first quarter.
The sales boom helped Smith & Wesson swing to a profit in the quarter. It earned $48.4m in net income, or 86 cents a share, compared with a $2.1m loss, or 4 cents a share. On an adjusted basis, earnings came in at 97 cents a share. Analysts had expected a smaller profit of 48 cents.
Shares in the company jumped more than 5 per cent in after-hours trading, after sliding 9.5 per cent during the regular session amid a broader market rout. The stock is up 164 per cent so far this year.
Smith & Wesson said the second quarter was the last to include financial results from the company’s outdoor products and accessories division, which was spun off as American Outdoor Brands last month. The segment booked a 52 per cent rise in gross sales to $50.6m in the first fiscal quarter.
Following the spin-off, Smith & Wesson’s board approved a quarterly cash dividend of 5 cents a share.