Smith & Wesson Brands falls 6% after Q2 results on ‘temporary margin headwinds’

“Although our gross margin continues to be temporarily pressured by fixed-cost absorption, inflationary factors, and inventory reserve adjustments, we strengthened our working capital position by reducing production to drive internal inventory levels down and we anticipate that the temporary margin headwinds will abate in the fourth quarter. We repurchased nearly 646,000 shares during the third quarter, utilizing $8.2M of our $50M authorization, and paid $5.5M in dividends. Consistent with our capital allocation strategy, our board of directors has authorized a 12c per share quarterly dividend, which will be paid to stockholders of record on December 21,with payment to be made on January 4,” noted management in a release. Shares are currently down only 4% in after market trade, off of earlier lows.