Investors concerned about Remington’s inventory glut

By Daniel Terrill

The sudden slowdown of gun sales causing a surge in inventory levels has investors concerned about the earning potential for Remington Outdoor Company.
During a conference call Wednesday, many prodded Remington executives about the health of the company, which finally reported results in the black following two years of paying relocation costs, amid an unstable market.
“Because of the current market conditions, we continue to make prudent business decisions surrounding our continued cost management activities as well as reducing production rates on certain product lines in our factories,” said Steve Jackson, Remington’s chief financial officer.
Remington consolidated most of its 16 brands to a facility in Huntsville, Alabama, two years ago intending to save on operating costs, but last month used the same argument to layoff more than 170 people.
For Fiscal Year 2016, which coincides with the calendar year, Remington reported $18.9 million in profit, up from the $135.2 million loss the year before due to relocation costs.
During the fourth quarter, gun sales followed seasonal trends but failed to perform at surging levels seen in years’ prior, according to federal data reviewed by Guns.com.
Jason Lindell, Remington’s vice president of financial planning and analysis, said the company finished the year with higher inventory levels

Source: Guns.com