Earnings preview: What to expect when American Outdoor reports Q4 2019 results

American Outdoor Brands Corporation (NASDAQ: AOBC) is scheduled to report fourth quarter 2019 earnings results on Wednesday, June 19. Analysts expect the company to report earnings of $0.17 per share on revenue of $168 million. This reflects a 29% decrease in earnings and a 2% decrease in revenue on a year-over-year basis.

The company’s top line results in the quarter are likely to be affected by the softness in the firearms market in the US. Lower demand and sales of firearms might pressure the company’s revenue in the period. The industry also saw a decline in the adjusted number of monthly background checks conducted on potential gun buyers.

Last month, the company’s stock fell to a 7-year low of $8.52 over concerns about the future of the firearms market. American Outdoor has been trying to focus more on outdoor-related offerings rather than the firearms business recently.

The gunmaker combined its electro-optics operating unit with its outdoor products unit to drive efficiencies. In January, the company also acquired LaserLyte as part of its electro-optics platform.  

In the third quarter, American Outdoor reported a 2.9% increase in net sales to $162 million. Due to the restructuring of the electro-optics business and related impairment charges, the company recorded a net loss of $0.10 per share in the period. Adjusted EPS was $0.16 per share.

For the fourth quarter, AOBC has guided for revenues in the range of $162-172 million and adjusted EPS in the range of $0.11-0.15 per share. For the full year of 2019, revenue is expected to be $625-635 million and adjusted EPS is expected to be $0.69-0.73.

AOBC’s shares have fallen 29% year to date.

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