US Markets
U.S. stocks were mixed on Friday after the U.S. economy added back a greater than expected number of payrolls in August. The unemployment rate was 8.4% versus the 9.8% expected, and lower than the 10.2% in July. The Dow gained 0.38% to 28,400, the S&P 500 index fell 0.43% to 3,440 and the Nasdaq Composite Index was down more than 180 points, or 1.56%, to 11,278.
Gainers
• The Cooper Companies, Inc. (COO, Financial) +8.4%
• FedEx Corp (FDX, Financial) +1.4%
• Coty Inc (COTY, Financial) +5.5%
• International Business Machines Corp (IBM, Financial) +0.4%
Losers
• Ciena Corp. (CIEN, Financial) -5.3%
• Qorvo, Inc. (QRVO, Financial) -1%
• Walmart, Inc. (WMT, Financial) -0.5%
• Baidu, Inc. (BIDU, Financial) -0.2%
Global Markets
The main European stock markets traded in the green. The UK's FTSE 100 gained 0.65%, France's CAC 40 jumped 0.62%, Germany's Dax was up 0.07% and Spain's Ibex 35 gained 1.23%.
In Asia, Japan's Nikkei 225 fell 1.11%, India's BSE Sensex retreated 1.63%, Hong Kong's Hang Seng lost 1.25% and China's Shanghai Composite was down 0.87%.
Smith & Wesson releases earnings report
Shares of Smith & Wesson Brands (SWBI, Financial) gained more than 5% Friday morning but soon turned into the red after the company announced its fiscal first-quarter 2020 results yesterday. The company posted earnings per share of 97 cents, beating analysts' estimates by 48 cents. Revenue of $277.97 million grew 124.8% year-over-year and also beat expectations by $73.12 million.
President and CEO Mark Smith had the following to say:
"Today, I am pleased to report record-breaking first quarter financial results for Smith & Wesson Brands, Inc… Our record revenue and unit sales during the quarter demonstrates our ability to rapidly respond to increased demand through our flexible manufacturing model and our state-of-the-art distribution facility, delivering outstanding products that resonate with the firearms consumer… With the successful spin-off of our Outdoor Products & Accessories segment last week, we have now returned to our heritage as a pure-play firearms company, with a focus on organic growth and returning excess capital to our stockholders.
In the first quarter, net sales were $278.0 million compared with $123.7 million for the same quarter of last year, up 124.8%.
By segment, sales in the Firearms segment reached $229.9 million, an increase of $134.4 million, or 140.9%, when compared to the first quarter of 2019. Outdoor Products & Accessories segment gross sales were $50.6 million, an increase of $17.4 million, or 52.3%, over the comparable quarter last year.
Further, the gross margin was 42.0%, up from 38.7% for the same quarter last year.
The GAAP net income was $48.4 million, or 86 cents per diluted share, compared with a GAAP net loss of $2.1 million, or 4 cents per diluted share, for the comparable quarter last year.
The operating cash flow was $83.5 million, which was applied to partially pay down $135.0 million of the revolving line of credit.
Barrow, Hanley, Mewhinney & Strauss sold out the stock during the quarter.
Disclosure: The author holds no positions in any stocks mentioned.
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