Smith & Wesson sees surge ahead of election

Move over, Brett Favre; the real Gunslinger is here.

Smith & Wesson raised its full-year sales forecast and posted better than expected Q1 earnings, helping it finish the week with a bang. The gun maker earned $0.28 per share on revenue of $136 million in the first quarter, topping Wall Street’s expectation of $0.18 on $128.7 million.

The results and stronger U.S. demand led management to increase its full-year sales forecast to a range of $530-540 million, well ahead of the consensus estimate of $498.2 million. In the second quarter it expects sales of $130-135 million while analysts are looking for $119 million.

CEO James Debney commented, “As we come into Christmas…there is a lot of consumer purchase activity. We want to be in the forefront of the consumer’s mind.”

The company is looking to remain focused on its core firearms business as it sees opportunities to increase revenue and reduce costs going forward. While investors cheered results, analysts have recently cautioned that gun demand could fall off following the U.S. election. They believe some gun demand may be driven by concerns the Barack Obama may tighten gun regulations, leading buyers to hit the gun market earlier than usual.

Smith & Wesson (SWHC : NASDAQ : US$10.16), Net Change: 1.16, % Change: 12.89%, Volume: 13,688,359

About the Author

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx.

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