Very logical, thanks for your views. I only have one small thing to add.
Two weeks ago, AOBC (new ticker symbol of the "old" Smith & Wesson) announced their financial results through April 30. At that time, they surely had visibility of sales/shipments through the end of June (end of the rebate period) and their backlog (future orders in hand) with projected ship dates.
As I understood their words, they advised their inventories were still bloated and that it could take a couple quarters (six months) to get them back in line. They also advised they will make several significant product introductions and will begin building inventory of those new models to satisfy expected demand.
As I read the numbers at the end of April, their inventories (means finished goods and work-in-process) were 69% higher than one year before. Also, their accounts receivable were 88% higher (likely meaning they've shipped a hell of a lot more product and/or have given customers extended payment terms). These numbers cover all the group's brands but, anyway, the majority of the business is S&W so we probably have some view of what's been happening inside that company.
They sold nearly 200,000 Shields in the quarter ending April 30th.
Why am I presenting all these numbers? Because "somebody" recognized that sales weren't meeting the plan and that inventory was way too high. That somebody created a plan to juice the sales and reduce the inventory. That "somebody" knew exactly what he/she wanted to accomplish and it seems strange to later state that demand exceeded expectations. In fact, if the demand was good enough, why another rebate offer beginning July 1? Why will it take so much longer to reduce the inventory to an acceptable level? If I have 100 of something and need to get that down to 55, I guess I shouldn't be surprised if I manage to sell 45.
