After trading flat for a year, Smith & Wesson (SWBI) plunged 21% following its Q4 2021 earnings report as sales fell 31% from the previous year’s quarter. In its latest 10-Q, Smith & Wesson blamed a tough comparison, citing heightened demand the prior year “driven by civil unrest, ongoing COVID restrictions, and news events driving increased fear of personal safety and firearm restrictions.”

Of particular concern was the 43.4% decline in operating cash flow, which Smith & Wesson attributed to

“Cash provided by operating activities from continuing operations for the nine months ended January 31, 2022 was negatively impacted by an incremental $75.1 million increase in inventory due to increased production capacity combined with reduced consumer demand…”

Of Smith & Wesson’s $132.4 million in inventory, 85.5% is finished goods or parts.