American Outdoor Brands Corporation (NASDAQ: AOBC) missed both revenue and earnings expectations for the third quarter of 2020. The stock plummeted 23% in aftermarket hours on Thursday.
Total revenues rose 2.9% year-over-year to $166.7 million,
but fell below forecasts of $187.2 million.
GAAP net income was $5.7
million, or $0.10 per share, compared with a net loss of $5.7
million, or $0.10 per share, for the same period last year. Adjusted
net income was $6.9 million, or $0.13 per share. Analysts had projected
adjusted EPS of $0.23.
During the quarter, Firearms revenue
benefited from changes in the timing of the company’s excise tax assessment,
and from the positive impact of its new M&P9 Shield EZ pistol. Lower-than-expected
orders across multiple product categories from some strategic retailers hurt
the results.
Revenue in Outdoor Products & Accessories increased due to higher sales of shooting, hunting and cutlery products, which was helped by demand from several large retailers.
For the fourth quarter of 2020, the company expects net
sales of $205-215 million and adjusted EPS of $0.33-0.37. For the full year of
2020, net sales are expected to be $650-660 million and adjusted EPS is
expected to be $0.58-0.62.
Revenue for the Firearms segment is estimated to be between $502 million and $507 million and revenue for the Outdoor Products & Accessories segment is projected to be between $170 million and $175 million for fiscal year 2020. American Outdoor is planning to spin off its Outdoor Products & Accessories business.
The transaction will create two separate public companies – Smith & Wesson Brands Inc. and American Outdoor Brands Inc. Smith & Wesson will focus on firearms while American Outdoor will focus on outdoor products and accessories. The spinoff is expected to be completed in the second half of 2020.
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