Life

The Surge In Gun Demand Boosted Smith & Wesson’s Quarterly Revenue By A Whopping 61%

#Morning Brew
by Last Updated

This week’s Brew quiz is live! Quick rundown: answer all five questions about this week’s issues correctly (don’t worry, it’s not cheating to look back!), and you could win a Brew swag prize and a shoutout in an issue next week. Good luck!
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“I don’t want to scare you, I just want to tell the truth. There will be consequences if Britain leaves the EU” — Francois Hollande, Prime Minister of France, supporting his British counterpart David Cameron with ominous comments on the potential negative consequences of a Brexit.

MARKET SNAPSHOT
Big Picture

  • Although U.S. stocks started the day in the red, a rebound in oil prompted gains across the board—marking a third straight green day ahead of today’s big jobs report

Alternatives to Watch

  • The dollar dropped the furthest it has in a month, propelling gold up to just a hair below its 13-month high

Market Movers

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CORPORATE PRIMER

Herbalife Gets Its Numbers (Way) Wrong

As if being accused of a pyramid scheme isn’t bad enough, Herbalife’s reputation took yet another hit: yesterday, it announced it had overstated its year-over-year customer growth…by 40%, and that’s just one of more than two dozen errors in its most recent filing. For the past three years, the nutritional supplement company has been battling Wall Street’s scrutiny over its marketing practices, and this certainly won’t help matters. Following the news, investors were left more skeptical than ever, sending shares down 7%—and yes, that number has been validated.

A New Theater Superpower

Get your popcorn ready: AMC Entertainment, the second-largest American movie theater chain, has acquired Carmike Cinemas, the fourth-largest, for $1.1 billion, a 19.5% premium over Carmike’s closing price. That’s a healthy $376,000 per Carmike screen, which tend to be located in more rural areas—in beautiful synergistic contrast with AMC’s urban focus. Oh, and one more thing: AMC is owned by China’s Dalian Wanda Group. That means America’s new largest theater chain would be Chinese-owned, continuing a recent trend of China targeting Hollywood.

Gun Rush

With mass shootings all over the news, you might expect Americans to be turned off to guns. Actually, it’s quite the opposite: fears over new regulatory gun laws have sparked a recent rush to stock up. This surge in demand boosted Smith & Wesson’s quarterly revenue by a whopping 61%. The gun manufacturer—which for its part is also worried guns will soon be off the market, or at least more limited—hopes to maintain sales growth by expanding into the less volatile sporting goods and military markets.

It’s Samba Season

The biggest rivalry in sports might be Nike vs. Adidas, but it hasn’t been much of a competition recently. Germany-based Adidas’ sales dipped last quarter as foreign currencies continued to falter and marketing costs shot up. However, 2015 still saw a surprising comeback, with profits up 29%. Adidas executives believe more popularity with customers will lead to long-term growth—especially in North America, where the company has struggled to make inroad—whereas analysts think it’s just short-term hype for the upcoming Olympics.

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OTHER STORIES

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ECONOMIC CALENDAR

PLAYBOY’S NEW CUSTOMERS

Playboy recently made waves when it changed its content from R-rated to PG-13—and it has been pretty good for business. Here’s the scoop on Playboy’s first non-nude issue:

  • Playboy’s digital ad revenue is up 75% and the number of print advertising pages is up by nearly 56% compared to this time last year.
  • Before the transition, many brands were hesitant to buy digital ads (for semi-obvious reasons); now, companies are far more keen on working with the magazine—which has met with 300 new and existing advertisers since the announcement.
  • Since Playboy’s website became “safe for work” in mid-2014, online visitors have grown 400%, with 16 million unique global visitors per month. The median age has also dropped sharply, from 47 (yikes) to 30 years old—attractive stats for advertisers.

Yesterday, we asked you, the Brewership, whether you’d feel safe in a self-driving car. The results are in, and while 75% of the AAA survey participants may be afraid, the Brew readership feels no such trepidation: a full two-thirds of you are ready for robot Jesus to take the wheel.

INTERVIEW QUESTION OF THE DAY

A Petri dish hosts a healthy colony of bacteria. Once a minute every bacterium divides into two. The colony was founded by a single cell at noon. At exactly 12:43 (43 minutes later) the Petri dish was half full. At what time will the dish be full? (Answer)

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BUSINESS TERM OF THE DAY

Flipping — A type of real estate investment strategy in which an investor purchases properties with the goal of reselling them for a profit. According to RealtyTrac’s U.S. Home Flipping Report (released yesterday, and yes, that is an actual thing), profits from home flipping hit a 10-year high last year, a potentially worrying sign that housing bubbles could be developing.

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FOOD FOR THOUGHT

If Netflix were a cable network, it would rank as the eighth-largest in the U.S., falling just behind CBS and Discovery and ahead of A&E and Univision. Not bad for a company that humbly began as a DVD-rental service.

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