Shares of Smith & Wesson slumped about 5% in extended trade on Thursday after the gunmaker posted quarterly results that underscored a drop in consumer demand following a surge two years ago.
The Springfield, Massachusetts, company said its profit tumbled from a year earlier in what it described as a “challenging” July fiscal quarter.
Gun sales to U.S. consumers surged in 2020 and 2021 amid the coronavirus pandemic and worries about civil unrest related to the presidential election and police killings of unarmed Black people.
“As expected, our first quarter results reflected a return to a normal demand pattern at the retail counter for firearms combined with temporary headwinds from inventory corrections within the channel,” Smith & Wesson Chief Executive Mark Smith said in a press release.
Smith & Wesson’s report echoed quarterly results from rival Sturm, Ruger & Company (RGR.N) on Aug. 3. Sturm, Ruger’s stock has fallen about 20% since its report.
During Thursday’s earlier trading session, Smith & Wesson dipped 1%.
Including its further decline after the closing bell, Smith & Wesson has fallen over 40% since Dec. 2, when it warned that demand was easing from pandemic highs.
For its July fiscal quarter, Smith & Wesson reported GAAP net income of $3.3 million, dropping from $76.9 million in the year-ago period. Net sales slumped 69% to $84.4 million.