The parent company of Smith & Wesson and other operations saw its net income jump by 28 percent to $9.8 million in its fourth fiscal quarter ended on April 30, on sales that were up by 2.2 percent to $175.7 million. The gross margin expanded by 2.7 percentage points during the quarter to 36.1 percent. The results topped the company's guidance, sending shares up by more than 7 percent.
It was a feat for American Outdoor Brands in view of an environment in the U.S. that has been marred by challenges for the firearms industry, including policy changes and reduced consumer demand for firearms and related accessories.
The group made progress toward its long-term strategy with the construction and ramp up of initial operations at its new Missouri Campus, which will house the logistics & customer services division as well as the group's outdoor products & accessories division. The 633,000-square-foot facility, which has commenced operations, will serve as the centralized logistics, warehousing and distribution operation for the entire company. It will enhance efficiencies by eliminating 570,000 square feet of in-house and third-party space across multiple locations, while generating capacity for future growth.
For the full fiscal year, the group's net income dropped by 8.5 percent to $18.4 million, weighed down by a $10.4 million impairment charge on its Crimson Trace brand, taken in the third quarter. Revenues went up by 5.2 percent from the previous year to $638.2 million. The gross margin increased by 3.2 percentage points to 35.4 percent on lower promotions and rebates.
In terms of categories, firearms sales improved by 6.3 percent from the year-ago quarter to $481.3 million. In the outdoor products segment, sales increased at a lower pace of 3.3 percent to $177.3 million. The group said it launched over 300 innovative new outdoor products, including the Caldwell Hydrosled, the Frankford M-Press, and the Bog DeathGrip Hunting Tripod. It also introduced a new line of sights and scopes from its Crimson Trace brand, which broadened its product offering while expanding its addressable market for this brand. In addition, it launched a re-branding initiative that expanded its Bubba brand from a single product focus to a lifestyle brand with a variety of new products that address the broader category of fishing gear and accessories.
Looking ahead at the full year 2020, the management expects revenues of $630 to $650 million with continued weakness in firearms and growth in outdoor.