Smith & Wesson Shuffles Finance Chiefs Amid Boom in Gun Sales

New CFO Deana McPherson is faced with managing strain on the company’s supply chain

Smith & Wesson generated $526 million in revenue from firearm sales in its latest fiscal year, a 10% increase.

Photo: bryan woolston/Reuters

香蕉视频苹果下载Smith & Wesson Brands Inc.’s new finance chief faces the challenge of navigating the gun industry’s booms and busts, as a recent surge in firearms demand calls for a ramp-up in production even as the company looks to stay lean.

Deana McPherson stepped into the role of chief financial officer Monday, following the spinoff of the company’s outdoor products business. Ms. McPherson, whose appointment was announced in November, joined the Springfield, Mass.-based company in 2007 and most recently served as its chief accounting officer. She succeeds Jeffrey Buchanan, who is retiring after nine years in the role.

Gun sales have surged in recent months. The number of firearm background checks conducted by the Federal Bureau of Investigation—a proxy for industry sales—rose 79% in July, to 3.6 million, compared with the same month a year earlier, part of a monthslong uptick that reversed a downward trend that began after the 2016 presidential election.

香蕉视频苹果下载Smith & Wesson generated $526 million in revenue from firearm sales during its fiscal year ended April 30, a 10% increase from a year earlier and the largest amount in three years, driven in part by higher demand for handguns.

Ms. McPherson said one of her priorities will be to increase efficiency now that Smith & Wesson is a stand-alone firearms company. She didn’t comment on specific plans, but a spokeswoman said the separation from American Outdoor Brands Inc. would enable the company to reduce costs over the long term.

“We operate using a cost model that helps us protect profitability during lower demand years, combined with a flexible manufacturing model that allows us to take full advantage of any rapid increases in customer demand,” Ms. McPhereson said.

香蕉视频苹果下载Smith & Wesson produces its firearm products in Massachusetts, Maine and Connecticut. A crucial element of its production are third-party manufacturers, which help it handle surges in demand. The strategy, which the company said it has used in the past, enables it to profit from higher demand without adding infrastructure costs.

Smith & Wesson didn’t disclose how many employees work in its firearms manufacturing, or how many third-party manufacturers it relies on. The company booked $48.4 million in operating costs during the three months ended April 30, excluding accounting expenses, roughly in line with the same period a year earlier.

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Managing the added strain on the company’s supply chain from the recent surge in demand will be an immediate priority, said Steve Dyer, chief executive and senior research analyst at investment banking firm Craig-Hallum Capital Group LLC. “The longer-term question and issue with this business is how do you manage a boom-and-bust business in a way that’s financially viable?” he said.

Smith & Wesson’s share price has roughly doubled since the beginning of the year. It closed at $20.91 on Monday.

Gun manufacturers have come under increased scrutiny following a spate of mass shootings. Retailers including Walmart Inc., Dick’s Sporting Goods Inc. and Kroger Co. have imposed restrictions on gun sales in recent years.

Competitor Remington Arms Co. filed for chapter 11香蕉视频苹果下载 last month amid high debt levels. Remington also faced litigation stemming from the 2012 Sandy Hook Elementary School shooting, in which the killer used a gun manufactured by the company.

Lawmakers in Congress have struggled to find common ground on measures that would impose new restrictions, such as expanded background checks, on gun ownership.

Smith & Wesson’s CFO switch is part of its separation plan with American Outdoor Brands, which makes fishing and hunting gear and will begin trading Tuesday on the Nasdaq Stock Market. American outdoor is run by Brian Murphy, one of the former co-CEOs of the combined company. Mark Smith, the other former co-CEO, runs the standalone firearm business.

香蕉视频苹果下载Smith & Wesson cited a number of reasons for the split when it announced the separation in November. A reluctance among some investors to own gun stocks, differences in the two units’ business models and possible legal liabilities facing gun manufacturers were among the factors in the separation, Mr. Dyer said.

Write to Kristin Broughton at kristin.broughton@wsj.com

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