Q2 Earnings Highlights: Smith & Wesson (NASDAQ:SWBI) Vs The Rest Of The Leisure Products Stocks
Looking back on leisure products stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Smith & Wesson (NASDAQ:SWBI) and its peers.
Leisure products cover a wide range of goods in the consumer discretionary sector. Maintaining a strong brand is key to success, and those who differentiate themselves will enjoy customer loyalty and pricing power while those who don’t may find themselves in precarious positions due to the non-essential nature of their offerings.
The 16 leisure products stocks we track reported a slower Q2. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 16.6% below.
After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.
Thankfully, leisure products stocks have been resilient with share prices up 6.9% on average since the latest earnings results.
Smith & Wesson (NASDAQ:SWBI)
With a history dating back to 1852, Smith & Wesson (NASDAQ:SWBI) is a firearms manufacturer known for its handguns and rifles.
Smith & Wesson reported revenues of $88.33 million, down 22.7% year on year. This print fell short of analysts’ expectations by 13.8%. Overall, it was a disappointing quarter for the company with a miss of analysts’ earnings estimates.
Mark Smith, President and Chief Executive Officer, commented, "Overall firearms demand during our first fiscal quarter was softer than we anticipated, but our results once again proved the resiliency of our flexible manufacturing model, which allows us to adapt quickly to any market conditions and still deliver on bottom-line profitability targets."
Smith & Wesson delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 4.9% since reporting and currently trades at $13.50.
Read our full report on Smith & Wesson here, it’s free.
Best Q2: American Outdoor Brands (NASDAQ:AOUT)
Spun off from Smith and Wesson in 2020, American Outdoor Brands (NASDAQ:AOUT) is an outdoor and recreational products company that offers firearms and firearm accessories.
American Outdoor Brands reported revenues of $41.64 million, down 4.1% year on year, outperforming analysts’ expectations by 1.4%. The business had a very strong quarter with an impressive beat of analysts’ earnings estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.2% since reporting. It currently trades at $9.07.
Is now the time to buy American Outdoor Brands? Access our full analysis of the earnings results here, it’s free.
Polaris (NYSE:PII)
Founded in 1954, Polaris (NYSE:PII) designs and manufactures high-performance off-road vehicles, snowmobiles, and motorcycles.
Polaris reported revenues of $1.96 billion, down 12.3% year on year, falling short of analysts’ expectations by 9.8%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.
Interestingly, the stock is up 2.3% since the results and currently trades at $84.
Read our full analysis of Polaris’s results here.
Ruger (NYSE:RGR)
Founded in 1949, Ruger (NYSE:RGR) is an American manufacturer of firearms for the commercial sporting market.
Ruger reported revenues of $130.8 million, down 8.4% year on year. This print lagged analysts' expectations by 5%. All in all, it was a disappointing quarter for the company.
The stock is down 6.4% since reporting and currently trades at $42.22.
Read our full, actionable report on Ruger here, it’s free.
Solo Brands (NYSE:DTC)
Started through a Kickstarter campaign, Solo Brands (NYSE:DTC) is a provider of outdoor and recreational products.
Solo Brands reported revenues of $131.6 million, flat year on year. This print topped analysts’ expectations by 2.4%. Aside from that, it was a disappointing quarter as it produced full-year revenue guidance missing analysts’ expectations and a miss of analysts’ earnings estimates.
The stock is down 25% since reporting and currently trades at $1.50.
Read our full, actionable report on Solo Brands here, it’s free.
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