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Gun maker American Outdoor Brands' shares drop on disappointing 4Q guidance

The Smith & Wesson brand projects income of $0.11 to $0.15 per diluted share on net sales of $162 million to $172 million

Smith & Wesson
Gross margin for the gun company was 33.4%, compared with 29.8% a year ago

American Outdoor Brands Corp (NASDAQ:AOBC) declined Friday after the gun company delivered a disappointing fourth-quarter outlook.

For the three months ending April 30, the maker of Smith & Wesson firearms projected late Thursday income of $0.11 to $0.15 per diluted share on net sales of $162 million to $172 million. The average estimate of analysts was for earnings per share of $0.20 on net sales of $170.51 million.

Shares of the company fell 5% to $10.80 in Friday's premarket Nasdaq trading.

READ: American Outdoor Brands pops after Smith & Wesson gun maker shoots past Street's fiscal 2Q estimates

The Springfield, Massachusetts-based company reported third-quarter net sales of $162 million, up 2% from a year earlier. Net income was $8.9 million, or $0.16 per diluted share, compared with $4.7 million, or $0.09 per diluted share.

"Our third-quarter results reflect year-over-year increases in revenue and operating profit,” CEO James Debney said in a statement, citing progress at the company’s new logistics and customer services facility in Missouri.

Gross margin for the quarter was 33.4%, compared with 29.8% a year ago.

Based on long-term sales forecasts for its Electro-Optics operating unit, the company said it decided to restructure and combine that business with its Outdoor Products & Accessories operating unit to drive efficiencies and increase operating performance.  

–This story has been updated to give the latest stock price–

Contact Dennis Fitzgerald at dennis@proactiveinvestors.com

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