Firearms marketplace and supplier Ammo (NASDAQ: POWW) released fiscal first-quarter results that were below expectations, sending shares down as much as 20% in Tuesday trading. As of 2:55 p.m. ET, shares were still down 13%.
Ammo has been a volatile stock, but its quarterly results, announced Monday night, still managed to catch Wall Street off guard. The company reported a fiscal 2023 first-quarter profit of $0.09 per share, down from $0.13 per share a year ago, on revenue of $60.8 million. The sales number was up sharply from $44.5 million last year.
The problem, as the numbers imply, was cost. Ammo's gross margin declined to 29.8% in the quarter, compared with 42.7% a year ago, due to higher materials costs and additional labor and overhead costs associated with the opening of a new manufacturing facility. Ammo believes much of that added cost will be temporary, providing the opportunity for margins to increase as the year goes on.
Source Fool.com