Last Update: 06-Sep-13 07:40 ET
Smith & Wesson shares shot down by 4% following disappointing Q2 guidance
Smith & Wesson (SWHC $11.00 -0.48) reported first quarter earnings of $0.45 per share, excluding non-recurring items, which is higher than expected, while revenues rose 25.7% year/year to $171 million which is higher than expected. Ex-last year's sales of Walther products pursuant to a distribution agreement that Smith & Wesson ended in April 2013, net sales grew by 36.4%. Gross profit for the first quarter was $72.8 million, or 42.6% of net sales, compared with gross profit of $51.2 million, or 37.7% of net sales, for the comparable quarter last year. Gross profit improved as a result of increased sales volume, leveraging of fixed costs, and a planned favorable product mix to meet the needs of consumers.
The company issued the downside guidance for the second quarter with EPS of $0.20-0.22, excluding non-recurring items which is below expectations with revenues of $135-140 million which is below expectations. The company issued fiscal year 2014 with reaffirmed EPS of $1.30-1.35 which is in line with expectations with raised fiscal revenues to $610-620 million from $605-615 million which is line with expectations.
"Ongoing increases in our manufacturing capacity, combined with strong consumer demand for firearms, resulted in increased market share and higher sales of our most popular M&P products."
Smith & Wesson (SWHC $11.00 -0.48) reported first quarter earnings of $0.45 per share, excluding non-recurring items, which is higher than expected,