Gunmaker Smith & Wesson Brands Inc. (NASDAQ:SWBI) reported Thursday that steel tariffs by the Donald Trump administration cut into its profitability last quarter and are expected to continue squeezing margins. The company posted a net loss for its first fiscal quarter despite what it called robust demand for new products.
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Steel Tariffs Hit Gross Margins
In its earnings call, Chief Financial Officer Deana McPherson specified that the company’s gross margin was hit by a “120 basis point negative impact from tariffs, stemming primarily from steel.” This pressure contributed to a quarterly net loss of $3.4 million, or $0.08 per share, on sales of $85.1 million.
The company projects the tariff impact will persist, with McPherson stating that second-quarter gross margin is expected to be in line with the first quarter’s 25.9%.
Firearms Market Remains ‘Relatively Normal’
Despite the financial headwinds, CEO Mark Smith described the current firearms market as “relatively normal” and cyclical, a shift from the surge years.
He pointed to a sharp divergence in the company’s portfolio, with handgun …