An iconic American gun brand has increased its sales despite an ongoing decline in the overall market.
On Thursday, Smith & Wesson posted its first year-over-year net sales increase in eight consecutive quarters. In the company’s latest quarter, sales jumped $29.8 million to $114.2 million. That represents a 35.4 percent increase from the same quarter last year.
“We are very pleased with our first quarter performance,” Mark Smith, the company’s president and CEO, said in a statement. “Our top line results reflected strong consumer demand for the Smith & Wesson brand at retail. Channel inventory of our products remained steady throughout the seasonally slow period this summer, indicating healthy pull through of our shipments at both distributor and retailer levels.”
The sales spike came as the overall gun market appeared to be on a downward trend. The National Shooting Sports Foundation, the gun industry’s trade group, has reported a precipitous drop in background checks for gun sales for the past three months in a row. The group’s analysis of FBI background check data found a 13.1 percent decline in August compared to the previous year. That came after it identified a nearly 20 percent drop in June. Sales levels for those months have fallen from record highs in 2020 to just above pre-pandemic levels, with few indications that a new floor was approaching.
But Smith & Wesson’s sales numbers could be a sign the floor is near.
While the company’s sales were down from the previous quarter, they were up compared to the same quarter last year. The cyclical nature of the gun business, which traditionally sees higher sales in the fall and winter months compared to the summer, makes looking at performance across the same quarter more instructive than sales compared to the most recent quarter.
Smith & Wesson isn’t the only gun business showing signs of improvement. Ruger, the only other publicly traded firearms manufacturer in the United States, also reported an increase in its net sales last month.
In August, Ruger reported $142.8 million in its latest quarter. That was up from the same quarter the previous year, though only by about one percent.
Still, the reversal is far from monumental.
Ruger’s 2023 results were down substantially from the same quarter in 2021, which saw over $200 million in net sales.
Smith & Wessson’s story is similar. Its most recent quarter is still about 58 percent lower than the record-setting sales of $278 million it saw back in 2021. It’s even below the same quarter in 2018, which saw $129 million in net sales.
Additionally, the company’s cost of sales increased. That produced a slightly lower gross profit than the previous year despite the sales increase. Net income was down as well. Although, net income per share was flat.
Smith & Wesson’s CEO said he was encouraged by the sales growth nonetheless. He said the company expects the momentum to carry into the next quarter, when gun sales traditionally increase.
“Innovation and our iconic brand’s reputation for quality continue to be big drivers of consumers’ preference for Smith & Wesson,” Smith said. “Combined with healthy, lean channel inventories as we enter the traditionally busy fall season, we anticipate these tailwinds will allow us to continue to deliver strong results.”