In a sign that demand for firearms is gathering steam after falling in the wake of recent restrictions on sales, American Outdoor Brands Thursday (AOBC) reported above-consensus earnings for the first quarter. The company’s stock gained more than 18% following the report.
Net income, on an adjusted basis, rose to $11.7 million or $0.21 per share during the three-month period from $1.2 million or $0.02 per share a year earlier, exceeding expectations. Reported earnings were $0.14 per share, compared to a loss of $0.04 per share last year.
“Our increased profitability was driven by consumer preference for our new products, reduced promotions versus the prior year, and solid progress on a number of our expense reduction initiatives, ” said CEO James Debney.
Total sales rose 7.6% annually to $138.8 million, which was in line with Wall Street estimates. Sales benefitted from recent innovations in the company’s product portfolio.
In recent quarters, American Outdoor Brands faced challenges in its key markets, mainly due to muted demand. Gun manufacturers have been under fire from regulators and social groups following widespread protests triggered by a series of shootings that shook the country, with the latest being the Jacksonville incident.
In a fresh blow to the pro-gun lobby, a district court recently imposed a ban on blueprints of 3D-printed weapons that can be downloaded from the internet.
Shares of American Outdoor Brands fell about 41% over the past twelve months. The stock traded lower throughout the regular session Thursday, but rose sharply in extended trading after the announcement.