One of the nation’s largest gun companies raked in record sales as Americans flooded gun stores last year.
Smith & Wesson reported its best sales year ever in 2020, topping $1.1 billion in net sales for the first time ever. That’s up more than 100 percent from 2019.
“Our manufacturing logistics teams produced and shipped nearly 2.5 million units last fiscal year, representing a 70 percent increase year on year,” CEO Mark Smith said during the company’s June 17 earnings call. “While during the same timeframe, the U.S. firearms market as measured by NICS grew by 42 percent.”
The unprecedented sales enabled the newly spun-off company to go debt-free and pay out a dividend.
“During fiscal 2021, we invested in our business and our people, we repaid all of our bank debt, we repurchased over 10% of our outstanding common stock, and we began paying our stockholders a quarterly dividend for the first time in company history,” said Deana McPherson, the company’s CFO, in a statement. “Our Board has authorized a new $50 million share repurchase program as well as a 60% increase in our quarterly dividend to 8 cents per share.”
The year of 2020 was the strongest for gun sales in history as unease created by the pandemic, prisoner releases, meat shortages, police brutality, nationwide rioting, and the election pushed people to buy guns for the first time. The deluge of new owners has exceeded the industry’s ability to produce new guns and, especially, ammo. Smith & Wesson reported having just one week’s worth of supply in distributor inventory during the earnings call.
Smith & Wesson isn’t the only gun company seeing incredible demand and growth. Ruger reported a nearly 50 percent jump in net sales during its first quarter of 2021, while top ammo makers Olin Company and Vista Outdoor have seen about a fourfold increase in their stock prices over the past year. The National Shooting Sports Foundation, which represents gun makers and dealers, said the entire industry is experiencing huge gains.
“I think every manufacturer right now is benefiting from this outsized level of demand that we’re witnessing,” Mark Oliva, a spokesperson for the group, told The Reload. “We are in a period of unprecedented demand. That’s undeniable.”
Smith & Wesson reported net sales jumped in their latest quarter. Coming in at $322.9 million, the quarterly sales jumped 67.3 percent over the same quarter from the previous year. The spike comes after the company boosted production by 60 percent and hired nearly 300 new employees. Smith said the production bump sets the company up for continued growth moving forward.
“Undoubtedly, our fourth quarter and the year have been remarkable, but the most exciting aspect has been how these achievements have positioned Smith & Wesson for long-term success,” he said.
The company’s strong quarter is further evidence Americans’ hunger for new guns is yet to be satiated. Civilians bought up more than 1.3 million guns in May 2021, second only to the previous May. More than 8.5 million guns have been sold so far this year, which is about 400,000 more than during the same period in 2020.
Oliva said demand will eventually level off, but the question is what level it stops at and when. With politicians, including President Joe Biden, continuing to aggressively push for bans on popular guns, such as the AR-15, the industry expects demand to remain elevated for the foreseeable future.
“We’re keeping pace with what we saw last year, and there are no indications, at this point, that demand is going to drop off precipitously,” Oliva said.