Ammo shares hammered again after revenue miss

Outdoor Holding

16/08/2022 15:44

** Ammo Inc  POWW.O  shares drop 18.1% to 1-month low $4.43
on Tues amid 2-day slump
    ** Co late Mon posted fiscal Q1 rev of $61 mln, below Street
view of $69 mln, per Refinitiv IBES data, with misses from both
its ammunition and online GunBroker businesses  urn:newsml:reuters.com:*:nGNX69P0tN
    ** Adj EPS of 9 cents surpassed consensus of 7 cents, though
gross margin decreased to 29.8% in qtr (down from 42.65% in Q1
2021 and 30.3% in prior qtr)
    ** Co reaffirmed fiscal 2023 guidance of rev in range of
$300-$310 mln and adj EBITDA of $108-$111 mln
    ** Reduced margin due to higher material costs and labor
expenses as co prepares labor force transition to new
manufacturing facility, co said
    ** POWW's shares on Mon tumbled ~10% after co announced plan
to split its traditional ammo segment and GunBroker into two
independent publicly-traded entities  urn:newsml:reuters.com:*:nL1N2ZR128  urn:newsml:reuters.com:*:nGNX3wJDV5
    ** Lake Street Capital cut its PT by $3 to $9 in wake of
results miss, but thinks business separation can create value
    ** "We view the spinout positively and think this should
provide investors with a steady manufacturing company with
Action Outdoor (Ammo) and a high growth opportunity with Outdoor
Online (GunBroker)," Lake Street writes in client note
    ** With decline on Tues, POWW shares down ~20% in 2022 and
off nearly 40% in past year

 (Lance Tupper is a Reuters market analyst. The views expressed
are his own)
 ((lance.tupper@thomsonreuters.com
lance.tupper@tr.com 1-332-219-1430))