AMMO, the Scottsdale, Ariz.-based company known for manufacturing firearm ammunition and operating an online marketplace for guns, experienced a surge in stock prices as its losses narrowed in the fiscal third quarter. The improved margins were the key driver behind this positive development.
On Friday, AMMO's stock shot up by 13% to reach $2.50. Since the beginning of the year, the company's shares have witnessed a growth of approximately 18%.
Third Quarter Results
During the third quarter which concluded on December 31, AMMO reported a loss of $1.64 million, equivalent to 2 cents per share. This marks a significant improvement compared to the same period last year when the loss was $4.1 million, or 4 cents per share. Although there was a 7% decline in revenue, amounting to $36 million, the reduction in losses is seen as a positive outcome.
Factors Driving Profitability
CEO Jared Smith explained during an analysts' call that the increase in traffic on GunBroker.com, together with the company's cost-cutting initiatives and reduced tooling expenses, contributed to improved profit margins in the quarter. As a result of these positive developments, AMMO has expressed optimism about its ability to return to profitability by fiscal year 2025.
Positive Demand for Ammunition
AMMO highlighted that it continues to witness encouraging signs of demand for ammunition, reinforcing market confidence in its future prospects.
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