Smith And Wesson Will Change It’s Name (Surprising Reason Why)

0
2080

In an effort to break further into the outdoor living and accessories market, a longtime mainstay in the firearms industry is changing it’s name.

Smith and Wesson will become American Outdoor Brands and the stock symbol will change to AOBC from SWHC. Here’s the weird thing, the company makes 86% of it’s money from selling guns, whereas accessories make up a small fraction of overall sales.

Check it out:

[quote_box_center]

The company’s chief executive officer, James Debney, said the name change will better reflect the growing business as a whole. He called American Outdoor Brands “a name that truly represents our broad and growing array of brands and businesses.”

Moving forward, Smith & Wesson will operate as a subsidiary of American Outdoor Brands and remain the title of the conglomerate’s firearm division. The name change and trading stock symbol “AOBC” will go into effect Jan. 1.

Since 2014, the company has acquired a number of brands that include outdoor and gun related companies, and launched four separate divisions. In addition to a firearms branch, it is comprised of a manufacturing services division, electro-opitcs and accessories.

Massachusetts-based manufacturer saw a dramatic drop in price per share at the beginning of the month when Debney unveiled plans to shift focus toward the rugged, outdoor and accessories market. During a quarterly conference call, he tried to sway investors that the future lies outside of just handguns and rifles, and offer assurances that the strategy would work as the country settles in with a pro-gun administration.

Yet, the company reported a $26 million increase in second quarter earnings with $233.5 million in sales and $32 million in profits. Firearm sales made up $233.5 million in quarterly revenue while the outdoor and accessories division pulled in just $39 million.

[/quote_box_center]

It seems that investors don’t like the shift to outdoor accessories. You could make the case that Smith and Wesson is throwing in the towel on trying to grow the firearms wing of their business under all the intense competition out there. Smith and Wesson voluntarily dropped out of the Army’s service pistol competition and they haven’t been putting out much else in terms of new groundbreaking products, although the quality of their products has been pretty decent as of late.
Transforming a gun company to an outdoor accessories company is a risky strategy. It will be interesting to see where Smith and Wesson, err I mean American Outdoor Brands, goes from here