Categories Earnings, Industrials

American Outdoor Brands (AOBC) misses Q3 revenue and earnings estimates

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.  

Also see: Ciena Corporation Q1 2020 Snapshot

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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