Tag Archives: company

Smith & Wesson parent company to split, separating its gun business

Smith & Wesson parent company to split, separating its gun business

Replay Video

UP NEXT

  • How McDonald’s really makes its money (Hint: It’s not from the Dollar Menu)

    Yes McDonalds makes a lot of money, but it’s not from selling its food! Veuer’s Lenneia Batiste has more.

    Veuer LogoVeuer
  • a man and a woman looking at the camera

    The best and worst US airports

    WSJ’s Scott McCartney released this year’s list ranking the country’s 20 largest airports. After looking at 15 metrics related to operations, value and convenience, the list has a new number one. Photo Illustration: Adam Falk/The Wall Street Journal

    The Wall Street Journal. LogoThe Wall Street Journal.
  • Jerome Powell wearing a suit and tie: Federal Reserve Chairman Jerome Powell speaks during a news conference in Washington, Wednesday, Oct. 30, 2019.

    Fed’s Powell: Debt is growing faster than economy, and that’s not sustainable

    Federal Reserve chair Jerome Powell testified before the Joint Economic committee. Jamie Herra Beutler (R-Ark.) questions.

    CNBC LogoCNBC

SETTINGS

OFF

HD

HQ

SD

LO

UP NEXT

UP NEXT

Video by CNBC

American Outdoor Brands Corp. said it will split into two publicly traded companies, one focused on firearms and the other on outdoor products, in an effort to reverse a stock-market decline amid rising pressure for tougher U.S. gun restrictions.

APPLE INC.

264.47

+2.51

+0.96%

CONSTELLATION BRANDS, INC.

184.01

+0.18

+0.10%

TESLA, INC.

346.11

-3.82

-1.09%

AMAZON.COM, INC.

1,753.11

-24.89

-1.40%

The resulting companies — Smith & Wesson Brands Inc. and American Outdoor Brands Inc. — will be achieved through the spinoff of the outdoor accessories business as a tax-free stock dividend to shareholders. The transaction is expected to be completed in the second half of next year, the Springfield, Massachusetts-based company said in a statement Wednesday.

“There have been significant changes in the political climate as well as the economic, investing, and insurance markets since we embarked upon what we believe have been our very successful diversification efforts,” Chairman Barry Monheit said in the statement.

The plan caps a tumultuous year for American Outdoor, as mass shootings in the U.S. make it more politically sensitive to sell firearms and ammunition. In addition, American Outdoor slashed its profit forecast in August to less than the lowest analyst estimate at the time, citing costs from tariffs on imports from China, where the company has manufacturing operations.

The shares fell 3.1% to $7.65 after the close of regular trading in New York. The shares have tumbled 39% this year. Sturm Ruger & Co., a rival gunmaker, slid 17% during the same period.

Pistols sit on display in the Smith & Wesson Corp. booth during the National Rifle Association (NRA) annual meeting in Dallas, Texas, U.S., on Saturday, May 5, 2018. President Donald Trump delivered a strong sign of support for the National Rifle Association at its annual meeting on Friday, as gun-rights advocates regroup in the wake of the mass shooting at a Florida high school.© Bloomberg Pistols sit on display in the Smith & Wesson Corp. booth during the National Rifle Association (NRA) annual meeting in Dallas, Texas, U.S., on Saturday, May 5, 2018. President Donald Trump delivered a strong sign of support for the National Rifle Association at its annual meeting on Friday, as gun-rights advocates regroup in the wake of the mass shooting at a Florida high school.

Lender Halt

For longtime shareholders, the name changes from the spinoff may spark a sense of deja vu. American Outdoor changed its name from Smith & Wesson Holding Corp. about three years ago.

Separating the firearms business could also help the American Outdoor accessory business improve its access to capital. Bank of America Corp. is among financial companies that have announced plans to stop lending to makers of assault-style guns used for non-military purposes, like Smith & Wesson.

After the split, the outdoor business won’t make rifles. But it will still sell accessories that are used in the firearms industry, such as scopes and sights.

Another firearms manufacturer, Vista Outdoor Inc., announced plans last year to unload its gun brand, though the company said it would continue selling bullets.

Retailer Resistance

Gunmakers are finding more resistance from retailers in the wake of multiple mass shootings in the U.S. Earlier this week, firearm manufacturers’ stocks fell after the U.S. Supreme Court refused to block a lawsuit against Remington Arms Co. by family members of some victims of the Sandy Hook massacre in 2012 at an elementary school in Connecticut.

Dick’s Sporting Goods Inc. moved away from gun sales after last year’s school shooting in Parkland, Florida. Walmart Inc. said in September it would discontinue sales of short-barrel rifle ammunition, as well as handgun ammunition. The retailer had faced renewed calls to stop selling guns and ammunition after an Aug. 3 mass shooting at one of its stores in Texas.

Michael R. Bloomberg, founder of Bloomberg News parent Bloomberg LP, is a donor to groups that support gun control.


Source : Link