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NAT’L – INDUSTRY INSIDER – Will American Outdoor Brands Be Spinning Off a Healthy Gun Company?

The big news heading into American Outdoor Brands’ (NASDAQ:AOBC) fiscal second quarter earnings report is, of course, the decision to split the company in two. Separating the outdoor gear and equipment maker from its Smith & Wesson firearms brand distances the former to pursue the much larger outdoor recreational market opportunity without the distraction of the volatile and politically charged gun business. What investors will be looking for on Thursday, Dec. 5, is whether American Outdoor and Smith & Wesson will be financially sound companies. The split won’t happen until next year, but the seeds of what the businesses will look like are being planted now. Investors have liked the idea of the breakup, with shares rising 15% since the news was announced. But American Outdoor’s stock was already rising, and shares are now more than 60% higher than their low point in early October. Much of that is based on the improving firearms industry picture. Although not likely to return to the skyrocketing trajectory of 2015 and 2016, gun sales reached their bottom earlier this year and have since been consistently climbing again, rising by double-digit rates for the last three months.   [full article]

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