Smith & Wesson Stock Drops As It Claims Inflation is Hurting Firearms Sale

The Key Takeaways

• Smith & Wesson reported a decline in second-quarter adjusted net income as demand for firearms was slowed by inflation.
• According to the gunmaker, consumer discretionary spending is lower than anticipated.
• Smith & Wesson explained that because of softer consumer demand, it was lowering its outlook for the second half of the fiscal year, and sees a big drop in current-quarter sales.

Smith & Wesson Brands (SWBI) shares plunged nearly 20% Friday, a day after it warned that inflation was reducing firearm sales and lowered its guidance.

The company reported adjusted net income for the second quarter of fiscal 2025 at $4.8 million or $0.11 per common share. That’s down from $6.8 million or $0.14 a share a full year before. The revenue increased 3.8% over the past year to $129.7 millions.

Mark Smith, the CEO at Chief Executive (CEO), has announced that these results “came in below our expectations as overall demand for firearms normalized late in the quarter,” That is the primary reason why. “continued to be inflation.” Smith said that “the consumer cautiousness with discretionary spend that we observed in recent quarters was more pronounced during the second quarter than we anticipated.”

Deana M. McPherson (CFO, chief financial officer) explained the following: “softer demand trends,” Smith & Wesson was lowering its expectations for the second half of the year, “and for our third quarter, we expect our top line to be approximately 10-15% lower than fiscal 2024.”

The news sent shares of Smith & Wesson into negative territory this year, sinking to their lowest level since early 2023.

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