(New York) U.S. arms maker Smith & Wesson skidded on Wall Street on Friday after news of a sharp contraction in sales, ending a euphoric cycle that had lasted since the start of the pandemic and the end of the 2020 presidential campaign.
Posted at 12:38 p.m.
Around 11:35 a.m., the title of the group from Springfield (Massachusetts), which is preparing its move to Maryville (Tennessee) next year, dropped 6.48% to 12.56 dollars.
Smith & Wesson’s revenue for the first quarter of its staggered fiscal year, which ends at the end of April, fell 69% from the same period last year to $84 million.
This figure “reflects the return to a more normal demand for firearms among retailers”, explained, during the conference call presenting the results, the general manager, Mark Smith, who assured that the group expected this sharp deceleration.
The leader referred to “the incredible strength in demand for firearms over the past two years”. “The demand had exceeded the capacities of the industry,” he said.
The uncertainty born of the coronavirus pandemic and the tension inherent in the 2020 presidential campaign had propelled arms sales to levels never seen in US history.
Some 22.8 million weapons were purchased in 2020, a jump of 65% compared to 2019, also fueled by fears linked to the protest movement following the murder of George Floyd, even if the outbursts during demonstrations have ended up being very limited.
In 2021, the pace had slowed down a bit, with 18.5 million guns sold, a figure which nevertheless remained very high compared to the average over several decades.
To cope with this explosion, most manufacturers had sought to increase their production capacities.
The slowdown of recent months has therefore caused a sharp rise in inventories, including among retailers, who have reduced their orders and accentuated the drop in turnover for manufacturers.
Mark Smith said orders had rebounded in recent weeks.