Gun manufacturer Smith & Wesson almost doubled its profits in its latest quarter, the company announced on Thursday. The period included the San Bernardino massacre that left 14 people dead and 22 seriously injured. A Smith & Wesson M&P15 assault rifle was used in the attack on 2 December.
The world’s largest gun company reported that it made gross profits of $86.7m (£61.1m) in the three months to the end of January – a 98% increase on the same quarter a year earlier.
James Debney, Smith & Wesson’s British chief executive, said the “exceptional peformance” was driven by “healthy consumer demand” for its products, particularly handguns.
The company recorded total sales of $210m, up from $131m a year earlier. It takes Smith & Wesson sales in the first nine months of its financial year to $502m. The company said demand has been so strong that it has ramped up production at its gun factories, as some distributors have begun to run out of some of its most popular firearms.
“The combined strength of our firearms and accessories businesses delivered an exceptional performance, driven by healthy consumer demand across our growing portfolio of firearm and outdoor lifestyle offerings,” Debney said. “Our product sell-through at distribution was much stronger than we had anticipated.
“Despite the fact that we entered our fourth quarter with lower inventories, we are focused on increasing the production rates of our key products during the fourth quarter and we are therefore increasing our guidance for the full fiscal year.”
FBI background checks, which act as a proxy for gun sales, hit a record 23.1m in 2015 – more than two and half times as many as those processed a decade ago. In December alone – the month of the San Bernardino shooting, more than 3.3m requests were processed through the FBI’s National Instant Criminal Background Check System (Nics).
Smith & Wesson’s shares spiked 6.3% to $27 in after-hours trading following the earnings release. The company’s shares have risen by 1,074% while Barack Obama has been in the White House. Over the same period, the S&P 500 index of leading US companies’ shares has risen by 130%.
Gun companies’ shares have experienced a spike after almost every recent mass shooting as consumers rush out to buy more guns out of fear that Obama may tighten gun control laws.
The gun rush has led Wall Street analyst Brian Ruttenbur to call Obama, who in January announced a string of executive actions designed to strengthen laws on gun sales, “the best salesman for firearms”.
Smith & Wesson’s results came as Wayne LaPierre, executive vice-president and chief executive of the National Rifle Association (NRA), vowed to fight the Democratic presidential frontrunner Hillary Clinton in a “bare-knuckled brawl” to hold on to American’s constitutional right to bare arms.
“Mrs Clinton, if you want to come after the NRA, and if you want to fight over the God-given rights of America’s 100 million gun owners, if you want to turn this election into a bare-knuckled brawl for the survival of our constitutional freedoms, bring it on,” LaPierre said at the 2016 Conservative Political Action Conference.
“We aren’t going anywhere, and we aren’t hard to find. Mrs Clinton, we are the millions of honest, decent citizens all over this country. We love our nation. We cherish our freedom. And November, we’re bringing the fight to you.”
The boss of the nation’s other big listed gun company Sturm, Ruger & Co has said he expects a big jump in demand for firearms if a Democrat wins the presidential election in November.
Michael Fifer said investors could earn much bigger profits if Hillary Clinton or Bernie Sanders becomes positioned to appoint future supreme court justices. Last month he said consumers’ fears that a Democrat will get to replace the conservative justice Antonin Scalia, who died earlier this month, would send consumers rushing out to buy more guns before any possible tightening of gun control laws.
LaPierre on Thursday described Scalia as a “monumental jurist and a hero of American freedom”.
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