American Outdoor Brands | $AOBC Stock | Shares Shoot Lower On Earnings Guidance


American Outdoor Brands Corporation  (NASDAQ: AOBC)


On Thursday December 7th, 2017, the company formerly known as Smith & Wesson reported their quarterly earnings after the market closed at 4 p.m. The company now known as American outdoor Brands Corporation, reported a solid and better-than-expected quarterly report.

However, it was the forward-looking guidance for the upcoming quarter that wreaked havoc on shares as they sold off hard in the aftermarket session. Shares which had closed the regular day at $14.93 plummeted to $12.77 or down -14.47% in the aftermarket session.

The shares have a short interest of about 14%, meaning 14% of  the outstanding shares have been sold before they have been purchased -so it is safe to say a good portion of traders and investors were betting against American Outdoor Brands either for this quarter or for the upcoming future. A competitor, Sturm,Ruger  has an even higher short float at roughly 25% for comparison.

The Numbers

The non-gaap earnings income came in at $0.11 per diluted share versus $0.07 which was expected. Revenues came in at a +$148 million dollars beating earnings estimates of +$138.5 million.

In their forward-looking guidance, the company suggests that they may earn somewhere around $0.07 per share in the upcoming quarter- well below $0.41 per share that was to be expected.

Company Comments

James Debney, American Outdoor Brands Corporation President and Chief Executive Officer, had this to say to investors:,

“Our results for the second quarter were within our guidance range despite challenging market conditions.  Lower shipments in our Firearms business reflected a significant reduction in wholesaler and retailer orders versus the prior year, and were partially offset by higher revenue in our Outdoor Products & Accessories business.  Total revenue for the quarter faced a challenging comparison to last year, when we believe strong consumer demand was driven by personal safety concerns and pre-election fears of increased firearm legislation. In Firearms, shipments of our new M&P branded polymer products in full-size, compact, and concealed carry models helped to offset lower orders in other product categories.  While we were pleased that our firearm inventory at distributors declined slightly during the quarter, we believe that orders were negatively impacted by heightened channel inventory from multiple manufacturers at retail. As expected, our internal inventories peaked during the quarter, as we prepared for a number of new firearm product launches.  Since then, we have reduced our internal production output levels and our outsourced capacity to help lower inventories and better balance production to demand. For the second half of fiscal 2018, our focus remains on ensuring that our internal manufacturing resources are aligned with demand.  In addition, we intend to introduce several exciting new products, and execute on long-term organic growth initiatives that support our vision of being the leading provider of quality products for the shooting, hunting, and rugged outdoor enthusiast”.

The Chart

The above price chart shows AOBC in the regular trading session on the left and in the after-hours trading session in the shaded area on the right. Shares shot down quickly once the earnings announcement hit the wires.

Company Profile

American Outdoor Brands Corporation designs, manufactures, and sells firearms worldwide. It operates in two segments, Firearms, and Outdoor Products & Accessories. The company offers handguns, long guns, handcuffs, sporting and hunting rifles, black powder firearms, and firearm-related products and accessories.

It also provides reloading, gunsmithing, and gun cleaning supplies; cutting tools and accessories; flashlights, tree saws, and related trimming accessories; shooting supplies, rests, and other related accessories; apparel, vault accessories, and laser and laser sights; survival and emergency preparedness products; and field rests, knives, gun vises, hearing protection products, camping gears, and case tumblers.

The company sells its products under the Smith & Wesson, M&P, Performance Center, Thompson/Center Arms, Caldwell, Wheeler, Tipton, Frankford Arsenal, Smith & Wesson, M&P, Thompson/Center, Lockdown, Hooyman, BOG-POD, Golden Rod, Non-Typical, Crimson Trace, Imperial, Schrade, Old Timer, UST, and KeyGear brands.

In addition, the company sells parts of other brands; operates a private law enforcement training facility; offers tooling, forging, heat treating, finishing, plating, plastic injection molding, and engineering support services to third-party customers; and licenses trademarks to third parties.

It serves gun enthusiasts, collectors, hunters, sportsmen, competitive shooters, individuals desiring home and personal protection, and military agencies; and law enforcement and security agencies and officers.

It markets its products through dealers, retailers, in-store retail channels, and range operations; social and electronic media; in-store retail merchandising systems and strategies; and Websites and online retail stores.

The company was formerly known as Smith & Wesson Holding Corporation and changed its name to American Outdoor Brands Corporation in January 2017. The company was founded in 1852 and is based in Springfield, Massachusetts.-YahooFinance