Gunmaker Smith & Wesson cuts jobs as sales plunge

Nathan Bomey
Guns being assembled at the Smith and Wesson factory in Springfield, MA.
Suzanne Kreiter | The Boston Globe | Getty Images

Gun sales plunged for the Smith & Wesson firearm maker in its most recent quarter, and the company slashed manufacturing jobs amid signs of a prolonged downturn.

But American Outdoor Brands also signaled that it's not concerned about big-box chains such as Dick's Sporting Goods taking action to limit gun sales following the Parkland, Fla. school shooting.

CEO James Debney said Thursday on a conference call that the company had shed about 25% of its manufacturing workforce over the last year. More than 200 workers, representing about 13% of factory personnel, lost their jobs in the company's most recent quarter.

The gunmaker said units shipped to distributors and retailers declined 38.3% for the period. Background checks for handguns, a figure that's considered a proxy for consumer demand, also fell 8.8%.

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As distributors cut inventory, the company has taken a hit, as well. And increased discounts have compromised profits.

Sales for the third period ended Jan. 31 fell 31.6% to $157.4 million. Net income fell 64.9% to $11.4 million.

American Outdoor Brands stock fell 5.7% to $8.87 at 10:12 a.m. Friday.

The company is projecting "flattish" gun revenue for the next 12 to 18 months, saying consumer demand may remain low "for some time."

Although Debney said he heard reports of "some increased foot traffic" and higher sales at gun retailers after the Parkland massacre, the uptick is not expected to be significant.

Firearm companies often benefit from concerns that gun rights could be restricted because some people rush to buy guns before it's too late.

The sales report came after Dick's ended sales of assault-style rifles at its Field & Stream locations, after having already banned the weapons at its namesake stores. Dick's, Walmartand Kroger's Fred Meyer stores also raised the minimum age to buy a gun to 21.

But the Smith & Wesson maker isn't concerned.

Sales of assault-style rifles by Dick's represented only 0.1% of American Outdoor Brands' overall sales.

"So there isn't really any impact," Debney said.