Rates: a problem for Smith & Wesson weapons manufacturer

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The company announced lower profits than expected Thursday due to a decline in gun sales. He also warned investors that his profits should bring in $ 5 million in the second half of the fiscal year because of the impact of tariffs resulting from the intensification of the US-Canada trade war. United and China.

Fees will primarily affect its outdoor products – hunting and fishing accessories representing more than a quarter of its sales. Many of these products are made in China and the company has warned that there are only alternatives to paying the cost of tariffs when they come into effect this year.

"As the pricing situation continues to climb, the opportunities to offset this impact have begun to decline rapidly," said CEO James Debney during a call to investors on Thursday. "Our supply chain in China is relatively sophisticated compared to that available in other low-cost countries, so it's hard to change quickly." entirely new takes time and the tariff period remains very vague. "

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The company has reduced its profit forecast for the full year as a result of the cost of the rates, even though it has maintained its revenue target.

"Without this impact, we believe our earnings per share would have been in line with our most recent forecasts, but pricing is now making this result unlikely," said CFO Jeffrey Buchanan.

The company did not reveal the amount of weapons manufactured in China, although companies face the distinct problem of declining firearms sales across the industry. The company's handgun shipments fell 7% in the quarter, while shipments of handguns, such as guns, declined 8%. Much of the decrease is attributable to promotions made at the end of the previous quarter, which increased shipments during this period but reduced sales in the most recent period.

Firearm sales have steadily declined over the past three years since the election of President Donald Trump. Firearm enthusiasts' fears about the adoption of gun control measures have eased since the 2016 elections, reducing the demand for very strong guns under President Barack Obama .
The decline in firearms sales and earnings during the quarter, combined with the reduced earnings forecast for the remainder of the year, sent American brands from outside (AOBC) 12% drop in morning trading on Friday after the report.

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