Smith & Wesson gun maker cuts jobs as sales plunge
Gun sales plunged for the Smith & Wesson firearm maker in its most recent quarter, and the company slashed manufacturing jobs amid signs of a downturn.
But the company, American Outdoor Brands Corp., also signalled that it’s not concerned about big-box chains such as Dick’s Sporting Goods taking action to limit gun sales following the Parkland, Fla., school shooting.
CEO James Debney said that the company had shed about 25 per cent of its manufacturing workforce over the last year. More than 200 workers, representing about 13 per cent of factory personnel, lost their jobs in the company’s most recent quarter.
The gun maker said units shipped to distributors and retailers declined 38.3 per cent for the period. Background checks for handguns, a figure that’s considered a proxy for consumer demand, also fell 8.8 per cent.
As distributors cut inventory, the company has taken a hit, as well. And increased discounts have compromised profits.
Sales for the third quarter ended Jan. 31 fell nearly 33 per cent to $157.4 million US. Net income slid almost 65 per cent to $11.4 million.
The stock price of American Outdoor Brands was little changed at $9.56 on Friday.
The company is projecting “flattish” gun revenue for the next 12 to 18 months, saying consumer demand may remain low “for some time.”
Although Debney said he heard reports of “some increased foot traffic” and higher sales at gun retailers after the Parkland massacre, the uptick is not expected to be significant.
Firearm companies often benefit from concerns that gun rights could be restricted because some people rush to buy guns before it’s too late.
The sales report came after Dick’s ended sales of assaultstyle rifles at its Field & Stream locations, after having already banned the weapons at its namesake stores. Dick’s, Walmart and Kroger’s Fred Meyer stores also raised the minimum age to buy a gun to 21.
But the Smith & Wesson maker isn’t concerned.
Sales of assault-style rifles by Dick’s represented only 0.1 per cent of American Outdoor Brands’ overall sales.
“So there isn’t really any impact,” Debney said.