U.S. firearms manufacturer Smith & Wesson won’t deliver its quarterly earnings until later today – but analysts are already predicting that the company will report a year-over-year increase in earnings on higher revenues when it reports the results for the quarter that ended Jul 2021. Revenues are expected to be $296.2 million, up 6.6 percent from the year-ago quarter.
That is likely to send stocks up, which could be good news for investors.
However, the company will once again have to contend with a group of nuns who bought stock in the publicly-traded company as they have called out Smith & Wesson for what they say is “indifference to firearms’ impact on human rights.” The Adrian Dominican Sisters have said that the Springfield-based company has a responsibility to adhere to the U.N. Guiding Principles on Business and Human Rights, and for a third time has placed a proposal on the ballot sent to shareholders to address those concerns.
The company’s annual shareholder meeting is scheduled for Sept. 27.
“We first filed this proposal in (2019) believing a formal human rights policy would serve the company and all its stakeholders, particularly in light of the company’s business model, for example its sales of potentially lethal firearms that could cause serious human rights harms,” sister Judy Byron, of the Northwest Coalition for Responsible Investment, told MassLive. “These policies have been adopted by hundreds of companies with far lesser risk profiles. The proposal garnered 36 percent support, which is a strong signal that shareholders understand the concerns and see the value of having a policy in place to mitigate these human rights risks.”
Smith & Wesson has maintained that complying with the nun’s proposal could subject it to tens of billions of dollars in liability from injured parties, and said that it makes it clear to shareholders that it is managing the risks associated with selling firearms, including risks gun violence poses to its reputation.
This is not the first time that Byron, who represents 14 Catholic faith-based organizations, has called for the company to change its business practices. In 2018, shareholders of the company passed a resolution that called for the firearm maker to report on what progress it has made towards improving gun safety.
The company’s management released a dismissive report shortly after the vote.
“The Company’s reputation as a strong defender of the Second Amendment is not worth risking for a vague goal of improving the company’s reputation among non-customers or special interest groups with an anti-Second Amendment agenda,” Smith & Wesson said at the time of the release of its report in early 2019. The group of nuns introduced the human rights policy resolution later that year, but the 36 percent of the shareholder vote it received was not enough to pass.
The sisters brought the measure once again last year, but then withdrew it and entered talks with management of what’s now called Smith & Wesson Brands Inc. following the spin-off of American Outdoor Brands’ camping business.
Those talks broke down last year, and now the measure is back before the stockholders.
Legal Woes
Smith & Wesson is also facing a lawsuit that was filed by the Mexican government against it and several other firearms manufacturers and distributors based in the United States. The suit, which was filed in federal court earlier this month, claimed that the U.S. gun industry has fueled the cartel wars south of the border.
Additionally, the company is being sued by mass shooting victims in Canada and by the state of New Jersey over its marketing practices, which New Jersey has said don’t reflect the state’s gun laws. Victims in a California synagogue shooting also won the right to sue the company, as the attacker had used a Smith & Wesson rifle.
Byron has said that the lawsuits are a “further testament” to the need for the gun maker to adopt a human rights policy.
Peter Suciu is a Michigan-based writer who has contributed to more than four dozen magazines, newspapers and websites. He regularly writes about military small arms, and is the author of several books on military headgear including A Gallery of Military Headdress, which is available on Amazon.com.
