The handguns maker said its revenue for this quarter, which will end January 31, might be as much as $180 million, an increase of 16% from what the company forecasted during December.
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The company said that “the sell-through rate of its products at distribution has been stronger than originally anticipated, resulting in reduced distributor inventories of its firearms”. Previously, the company had expected sales between $150 million and $155 million.
Americans are buying guns so quickly that retailers are struggling to keep them in stock. Adjusted earnings per share for the forthcoming quarter are expected to be between 39 cents and 41 cents compared to the prior guidance of 27 cents to 29 cents per share.
The stock is up over 6% after the announcement, which occured after the United States stock markets closed.
President Barack Obama’s impeding executive action on gun control has caused an insane spike in gun sales, according to data from manufacturer Smith & Wesson.
Require gun sellers who operate at gun shows and on the internet to be licensed, and subject them to criminal prosecution that can include up to five years in prison and a $250,000 fine if they are not. Gun sales in Ferguson, Missouri, soared in the months following protests that came as a response to the police killing of black teenager Michael Brown in August 2014.
Shares of Smith & Wesson and Sturm Ruger are both trading higher Tuesday morning.
Make gun dealers responsible for reporting guns that go missing. Competitor Sturm Ruger jumped 2.9%.
“As the firearms industry has seen numerous times before, the threat of gun control legislation again appears to be driving near-term retail sales acceleration, as consumers rush to dealers to purchase firearms they believe may one day become unavailable”, Rommel Dionisio, an analyst at Wunderlich Securities told MarketWatch.
The market’s behavior is logical, considering the clockwork relationship between any federal gun policy change and demand for firearms.
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The FBI was flooded with a record number of requests for background checks a year ago, including more than 3.3 million in December, following the terrorist attacks in Paris and San Bernardino, Calif.
