Smith and Wesson stock tanking

[Migolito]

Smith & Wesson stock crushed as gun demand cools

Shares of Smith & Wesson Brands took a hit after the company's update on gun demand.

www.foxbusiness.com

 

[Old Navy]

Well if all the new gun buyer sales have peaked and actually gone down maybe that will help the ammo shortage.

 

[SmokinJoe]

And if you read the entire report it looks like S&W is in really good financial shape, so maybe just an adjustment via the computer traders.

 

[muleman69]

I really think a lot of the Shield , no problems so far for a plastic gun and is priced right.....

 

[JEFFPPC]

Common sense says after record gun buying there must me a time of saturation. Yes, they might not be what the were but to loose them would not help our sport or it's image. Any large public company must find a fine line between the level of quality and the expected level of profits satisfy the stock holders and the modern day pressure from 401ks in place of traditional retirements. Another issue I am sure a gun manufacturer deals with is what out education system turns out. Lots of social science graduates for few low paying jobs and very few craftsmen in the trades. Of course the average helicopter parent is agast if a child wants to get his hands dirty. What will the folks at the club say.

 

[CarlGeorge]

One of the things that got burned in my brain after spending 30+ years in for-profit businesses is that running a business and keeping it profitable is REALLY hard...much much harder than it might appear. One senior manager I used to work for would say "Profit is the difference between two REALLY big numbers." (Revenue and expenses.) You can have one relatively minor change in one number or the other and it totally throws off profitability.

Managing that in an environment that sees huge changes in demand every few years seems like it would be especially challenging. (And....by the way....that demand change typically happens on a knife-edge.....not gradually. Those demand changes happen much more quickly than a business like this can typically smoothly react to.)

 

[DGP4]

I'd say that the company is in great shape notwithstanding the drop in sales which were unsustainable at that pace. It looks like they were smart and used the profits to pay off debt and buy back their stock.

"Since March 2020, Smith & Wesson's manufacturing team has increased production by over 82%. The company has also become debt-free after paying down $160 million of debt, has bought back $200 million of stock, paid nearly $20 million in dividends and invested nearly $40 million into its business. The company has over $107 million in cash on its balance sheet. "

Had Remington management had not pillaged the company's cash in the last few years and done the same, they would still be with us today.