$SWHC party has run...1 of my most DD best trades last 3-4yrs ...7min to un-halted GOING DOWN!!!!!? Robert K. (@cameltrader50) Jun. 19 at 04:28 PM
The stock fell 10% after management guided to a sales decline of between 21% and 24% from the same period a year ago. Sentiment declined to 69% bullish.
Management anticipates sales to come in between $130 million and $135 million. That's less than the $139.8 million consensus had expected.
Management said GAAP EPS for the current quarter should fall between 23 cents and 25 cents. The top end of that range still fell three cents short of the consensus estimate.
Management expects sales for fiscal 2015 to fall between $585 and $600 million. GAAP EPS should come in between $1.30 and $1.40. Consensus had anticipated sales of $1.45 EPS on sales of $621.85 million.
Aside from guidance, the current quarter was not terrible. The company said sales declined 4.6% to $170.4 million. However, excluding a product that is no longer sold, sales only declined 1.5%. And that number beat expectations. Consensus had called for $160.61 million in sales. Smith & Wesson reported earnings per diluted share of $0.44 for the quarter.
Initially, assault weapons bans adopted by several states in the wake of the Sandy Hook Elementary School shootings that left 20 children dead actually spurred a gun buying spree. Firearm enthusiasts loaded up on weapons in an effort to get their guns grandfathered in to new laws. Smith & Wesson actually saw an increase in sales of nearly 26% in the quarter ending last July before laws went into effect. Connecticut, one of the first states to adopt more strict gun laws after the Sandy Hook tragedy, enabled gun owners who registered magazines holding more than 10 rounds before Jan 1 of this year to keep their weapons.
But investors predicted that the gun hoarding would now cease and there were unlikely to be new laws to spur a wave of preemptive buying in the near future. In the meantime, existing laws could put a damper on sales.
That also beat consensus estimates of $0.40. Some investors said that Smith & Wesson would find a way to restore growth, despite harsher gun laws. They predicted that this was the bottom and the stock would rise. KPL1974 shared an idea on StockTwits.
$SWHC "Smith & Wesson should be bought on any weakness, says Wedbush" Thanks for the 11% discount? Duke2Duke (@duke2duke) Jun. 20 at 10:26 AM
But more investors now see reason in the bear's case than before.
At the time of publication the author had no position in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.