On Aug 28, 2015, shares of Smith & Wesson Holding Corporation SWHC reached a new 52-week high of $18.15, finally closing at $18.03. The closing price reflects a gain of almost 90.39% so far this year with a market cap of $1.15 billion.
Smith & Wesson recently announced its first-quarter fiscal 2016 (ending Jul 31, 2015) results. The company reported non-GAAP earnings of 32 cents per share, beating the Zacks Consensus Estimate of 22 cents by an impressive 45.5%. Earnings improved 23.1% from adjusted profit of 26 cents per share a year ago due to higher sales. Investors reacted positively to the beat with shares of the gun maker rallying 6.17% in after-hour trading following the earnings release.
Smith & Wesson’s total revenue in the quarter was $147.8 million, beating the Zacks Consensus Estimate of $144 million by 2.6%. The top line increased 12.1% year over year driven by revenue growth of 1.9% in the Firearm division to $134.5 million (90.9% of total revenue) and 29.9% in the Accessories division to $13.3 million.
The Accessories division was created after the acquisition of Missouri-based Battenfeld Technologies, Inc., a leading provider of hunting and shooting accessories, in Dec 2014. The takeover of Battenfeld Technologies had a positive impact on Smith & Wesson’s financials, which is expected to continue, going ahead.
Smith & Wesson is now focusing on the Thompson/Center Venture bolt-action rifle to build a solid platform for expansion and market share gains in this category of hunting rifle. The company continuously adjusts its manufacturing model to ensure growth and a robust pipeline. Currently, it has over 120 new products and line extensions under development, along with a number of products under the Smith & Wesson, Thompson/Center and Performance Center brands.
For the second quarter, Smith & Wesson expects revenues in the range of $135–$140 million. Non-GAAP earnings from continuing operations are expected in the range of 19–21 cents per share.
The company raised its full-year earnings guidance on solid first-quarter sales growth. For fiscal 2016, revenues are expected in the range of $610–$620 million, up from $605–$615 million expected earlier, while non-GAAP earnings are anticipated in the range of $1.14–$1.19 per share from $1.02–$1.07 projected earlier.
Smith & Wesson carries a Zacks Rank #1 (Strong Buy). Other favorably placed stocks in the broader space include Northrop Grumman Corporation NOC, Callaway Golf Co. ELY and Sturm, Ruger & Company Inc. RGR, all carrying a Zacks Rank #2 (Buy).
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