Perhaps a two-fold opportunity.....1) Badly beaten stock and 2) perhaps the need to run "end of year promotions" to move inventory....
Here is the story....
Smith & Wesson Shoots Self in Foot with Q1 Earnings Report
Firearm manufacturer Smith & Wesson (SWHC 13.10) dropped as much as 15% following Tuesday's close after the company reporting some underwhelming fiscal first quarter earnings results and issuing disappointing guidance.
Its first quarter profit of $0.26 per diluted share was slightly better than expected, yet that was down 35% from the year-ago period on 14% fewer weighted average diluted shares outstanding. And so it went for Smith & Wesson in the first quarter: net sales decreased 23% to $131.9 mln, its gross margin rate contracted by 530 basis points to 37.3% and its operating margin rate dropped by 860 basis points to 19.5%.
The poor year-over-year comparison was attributed to reduced sales volumes, related decreases in fixed-cost absorption, and three fewer production days versus the same period a year ago.
Judging by the stock's performance of late, that news did not come as a surprise to investors. Shares of SWHC have plunged 24% since mid-June.
Things aren't expected to get much better for the company or its stock in the near term considering Smith & Wesson is lowering its financial outlook for 2015, citing high inventories industry-wide resulting from channel replenishment and typical seasonality that slows consumer buying in its fiscal second quarter.
Read more: http://www.briefing.com/DisplayArti...eId=NS20140827065354StoryStocks#ixzz3BmbiZahV
Here is the story....
Smith & Wesson Shoots Self in Foot with Q1 Earnings Report
Firearm manufacturer Smith & Wesson (SWHC 13.10) dropped as much as 15% following Tuesday's close after the company reporting some underwhelming fiscal first quarter earnings results and issuing disappointing guidance.
Its first quarter profit of $0.26 per diluted share was slightly better than expected, yet that was down 35% from the year-ago period on 14% fewer weighted average diluted shares outstanding. And so it went for Smith & Wesson in the first quarter: net sales decreased 23% to $131.9 mln, its gross margin rate contracted by 530 basis points to 37.3% and its operating margin rate dropped by 860 basis points to 19.5%.
The poor year-over-year comparison was attributed to reduced sales volumes, related decreases in fixed-cost absorption, and three fewer production days versus the same period a year ago.
Judging by the stock's performance of late, that news did not come as a surprise to investors. Shares of SWHC have plunged 24% since mid-June.
Things aren't expected to get much better for the company or its stock in the near term considering Smith & Wesson is lowering its financial outlook for 2015, citing high inventories industry-wide resulting from channel replenishment and typical seasonality that slows consumer buying in its fiscal second quarter.
Read more: http://www.briefing.com/DisplayArti...eId=NS20140827065354StoryStocks#ixzz3BmbiZahV
Attachments
Last edited:
