Smith & Wesson Brands Inc. Down 16.78% To $9.80 After Earnings Miss

Wednesday, December 7, 2022 - Smith & Wesson Brands Inc. (SWBI) reported downside earnings and revenues today.

Smith & Wesson Brands Inc.'s earnings came in at an EPS of $0.26 per share, 35% lower than estimates for an EPS of $0.4 per share. The firm's earnings are down 77% since reporting $1.13 per share in the same period a year ago. Remember, earnings reported were on an adjusted basis, so they may not be comparable to prior reports and/or analyst estimates.

Analyst projections for Smith & Wesson Brands Inc. revenue came in at a consensus of $145.4 million. Second-Quarter revenues missed estimates for $121 million by $24.4 million (17%). The company achieved negative 47% growth year-over-year compared to the firm's revenue of $230.5 million from the year-ago quarter. The lower earnings growth relative to revenue signals Smith & Wesson Brands Inc. has not been able to improve its profit margin.

The stock is down 16.78% to $9.80 after the report.

Smith & Wesson Brands Inc.'s profit margins took a hit as earnings fell at a faster pace than revenues.

Wall Street Analysts had an average rating of Strong Buy on the stock prior to the report.

Trading in the five days leading up to the report earned Smith & Wesson Brands Inc. a Bearish Sentiment Rank from InvestorsObserver.

Prior to the report, InvestorsObserver gave the stock an overall score of 36. Meanwhile, the average Wall Street analyst rated the stock a Strong Buy.

Smith & Wesson Brands Inc is a U.S.-based leader in firearm manufacturing. It operates under one reportable segment: Firearms, which includes firearms distributions and manufacturing services. The company manufactures handguns, long guns, sporting rifles, shooting gear, and suppressor products. The firm's brand portfolio consists of Smith and Wesson, M&P, Thompson/Center Arms, Performance Center, and Gemtech; which are used for defense, law enforcement, hunting, and sporting purposes. The company operates internationally, with the majority of income generated by the U.S. market from its handgun products.