Guns and Weapons

Smith & Wesson remains upbeat on firearms outlook

Smith & Wesson gives weak Q3 EPS guidance

After soaring demand during the Obama years, Smith & Wesson Holding is bullish on the outlook for firearms sales under a Trump presidency and the gunmaker's CEO insists they don't see any slowdown ahead.

"What we saw in mix for Black Friday was very encouraging," said Smith & Wesson CEO James Debney during the company's fiscal second-quarter earnings conference call after the market close. "We see what's shaping up to be a good environment at retail."

Smith & Wesson's second-quarter earnings per share were 68 cents per share, ahead of analysts' average estimate of 57 cents. But the company's fiscal third-quarter guidance was seen as below the Street and contributed to the stock falling as much as 6 percent in after-hours trading Thursday.

During a question-and-answer session, Cowen analyst Cai von Rumohr noted that firearms sales have been "quite volatile under [President] Obama" and asked what kind of sales trends the company sees under a Trump presidency.

Smith & Wesson's CEO responded by saying they see business growing at a "single-digit to…high-single digit" pace. Overall, Debney said the outlook is for a "normalized environment" free of events that might spur consumer buying.

"That's really the environment where we can take market share and continue to grow," he said.

Fear of firearms regulation during the Obama years and talk of gun restrictions by some Democratic presidential candidates during the election contributed to record levels of background checks for firearms, which is viewed as a bellwether for gun sales.

But with President-election Donald Trump, those concerns have abated.

Also, the CEO added that the demographics of the firearm consumer are very different now to what they were under the George W. Bush administration.

"Many more women than ever before taking an interest in the shooting sports," he said. "We are excited about the future. The firearms business remains strong and we're excited to be executing our inorganic strategy."