The parent company of Smith & Wesson reported a net loss of $2.16 million for the first quarter ended July 31 against a net profit of $35.2 million in the year-ago period as it continued to suffer from a downturn in the U.S. market for firearms. Heavy promotions and lower economies of scale in manufacturing sent the gross margin down by 10.8 percentage points to 31.5 percent.

Total revenues plunged by 38 percent to $129.0 million in the quarter. While revenues from firearms sank by 49 percent to $99.4 million, generating a gross margin of 27.4 percent, revenues from the growing Outdoor Products & Accessories segment expanded by 123 percent to $32.5 million, with an organic sales increase of 11 percent and a 44.8 percent gross margin.

A few weeks ago, the group acquired Bubba Blade, a brand of fishing knives. Its other assets in the segment are Crimson Trace, Taylor Brands and Ultimate Survival Technologies. They all come from previous acquisitions.

In view of the situation in the firearms market, the group is expecting a big contraction in its turnover to between $700 million and $740 million, down from $903.2 million in the past year.