An attendee walks through the Smith & Wesson booth at the NRA’s annual meeting.
Shares in Smith & Wesson Brands Inc. fell Friday morning after the company said demand for guns was back to pre-pandemic levels.
The arms maker had reported net sales of $84.4 million for the first quarter on Thursday, down 69% from the same time last year. Smith & Wesson CEO Mark Smith blamed the “challenging”[ads1]; quarter on the return to normal demand levels and the company having to correct inventory levels.
“The industry experienced our first normal summer decline in three years,” Smith said in a news release. In addition, he said manufacturer orders were “artificially depressed” as the company’s partners sold through existing inventory.
Demand for guns had increased in late 2021 and early 2022 amid the pandemic and civil unrest related to police killings of unarmed black people and the presidential election.
Analysts agreed with Smith’s assessment of the normalization of demand for firearms.
“While we are disappointed with results that missed our estimates, we believe the company remains disciplined in its approach to long-term growth and prudent management of channel inventory,” a Lake Street analyst said in a note.
Smith & Wesson has also been the subject of congressional scrutiny after lawmakers criticized the way gun makers marketed their products, particularly to young men.
For the fiscal quarter ended July 31, Smith & Wesson reported net income of $3.3 million, down from $76.9 million in the same period a year earlier.
Smith & Wesson’s stock fell about 6% in morning trading. The company’s shares were down around 25% so far this year at Thursday’s close.