Smith & Wesson just reported a blockbuster quarter and says demand for guns is through the roof
The gunmaker beat analysts' expectations for revenues and profits, as firearm sales were more than even the company had anticipated.
Smith & Wesson posted revenues on Thursday of $210.8 million, beating the estimate for $179 million, according to Bloomberg. Adjusted earnings per share (EPS) came in at $0.59, versus $0.41 expected.
Shares were halted for news pending as the market closed, and they rallied as much as 8% after trading resumed.
They surged 87% over the past 12 months as demand for firearms grew.
This is partly because of consumer concerns about forthcoming tougher gun laws. Demand for guns is rising because people are worried that firearms will become harder to buy in the future.
In January, US President Barack Obama teared up during a speech calling for wider background checks.
Smith & Wesson CEO James Debney highlighted the strong demand in the earnings release:
During the third quarter, the Adjusted National Instant Criminal Background Check System (NICS) data, which serves as an indicator of consumer purchases, reported a significant increase in growth versus the prior year, especially in handguns. In addition, our product sell-through at distribution was much stronger than we had anticipated...
Despite the fact that we entered our fourth quarter with lower inventories, we are focused on increasing the production rates of our key products during the fourth quarter and we are therefore increasing our guidance for the full fiscal year.
The company also raised its guidance for full-year earnings. It now expects revenues of $712 million to $717 million, up from $650 million to $660 million.
Here's a chart showing the rise in shares:
