Shares of Smith & Wesson Brands experienced a decline in post-market trading on Thursday, following a decrease in profit despite a rise in sales. The stock dropped 7% to $12.90 after a 2.5% fall at Thursday’s close. However, shares have seen a significant 60% increase this year.
In the quarter ending October 31, the Maryville, Tenn.-based firearms manufacturer reported a profit of $2.5 million, or 5 cents per share. This is a considerable drop from the previous year’s $9.6 million profit, equal to 21 cents per share. According to analysts polled by FactSet, the anticipated per-share earnings were 14 cents, making the actual result fall significantly short.
When excluding certain one-time items, adjusted per-share earnings amounted to 14 cents. Furthermore, revenue increased by 3.2% to $125 million, surpassing the $123.8 million expectation from analysts polled by FactSet.
Deana McPherson, the Finance Chief of Smith & Wesson Brands, acknowledged that the company’s gross margins were still under pressure due to fixed-cost absorption, inflation, and inventory adjustments. However, McPherson expressed optimism that margin headwinds would ease in the fourth quarter.
