Smith & Wesson Signals End of Gun Boom
Firearms manufacturer says demand is ebbing as the company builds inventory and loses share.
December 3, 2021
Smith & Wesson (SWBI), a gun manufacturer, lost approximately a quarter of its market value after signaling waning demand for handguns and long guns. In its latest 10-Q, Smith & Wesson warned demand for guns had declined significantly:
-Handgun sales declined 2.2% with shipments to sporting goods stores declining 14.3%
-Long gun sales decreased 20.6% with shipments to sporting goods stores declining 37.3%
Even more concerning, overall consumer demand— as indicated by background checks reported in the National Instant Criminal Background Check System ( NICS)— decreased 24%. The worst news though is that Smith & Wesson suspects it’s losing ground to competitors in both handguns and long guns:
“...we believe our market share likely declined in the quarter as compared to NICS.”
With demand decelerating, Smith & Wesson announced a $41.8 million increase in inventory. The company acknowledged inventory levels are in excess of demand and warned it will continue to build inventory:
“We expect finished goods inventory will continue to increase in the next quarter as we bring our stock to a more desired level in anticipation of future consumer demand.”
Related: RGR, VSTO, OLN, POWW
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