Vista Outdoor Inc. (NYSE: VSTO) may not be a household name to many investors, but it is for those who are hunters and gun enthusiasts. This is the nation’s leader in ammunition manufacturing, and it also has many brands tied to optics and outdoor sporting. The reason that Vista Outdoor is not as well known on its own is because it was the recent spin-off from ATK. The ammo maker’s earnings came up a tad short, but for a longer-term view, the company expects a return to normalcy later this year.

One issue that 24/7 Wall St. has with the big post-earnings drop that has been seen is that analysts generally are off the mark with companies that just underwent a transformational change. Now, the rocket business and the defense and advanced weaponry division is merged with the space systems of Orbital ATK Inc. (NYSE: ATK), and now Vista Outdoor is a standalone company for ammunition and all the accompanying brands and products used by hunters and gun enthusiasts.

Some of Vista’s brand names include Federal Premium, Savage Arms, Bushnell, Primos, BLACKHAWK, Bolle, Serengeti, CCI, Blazer and many others.

Another issue that Vista will always run into is that there is a degree of cyclicality in its reports. There is also the political and social swing that can create more demand or curb demand as well.

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For the quarter ending on March 31, Vista’s sales were down 14% to $485 million, but for the year those sales were up 11% to $2.08 billion. For the quarter, gross profit was down 22% to $123 million and operating profit was down 55% to $39 million. For the year, that gross profit was up 13% to 529 million and operating profit was down 21% to $184 million. The acquisitions of Bushnell and Savage brands played a role in the reporting, with organic sales down by 9% from $2.28 billion in the prior year.

If investors are looking for a price-to-earnings analysis here: Vista Outdoor’s adjusted and fully diluted earnings per share was $2.35, versus $2.47 in the prior year. For 2016 (March end), the company’s guidance was for $2.00 to $2.20 in earnings per share, revenues of $2.05 billion to $2.11 billion, free cash flow of $150 million to $175 million and a tax rate of approximately 38%.

Chairman and Chief Executive Officer Mark DeYoung said:

In the fourth quarter, Vista Outdoor successfully spun off from ATK, resulting in a new publicly traded company with a strong balance sheet, a seasoned leadership team, and a powerful and unique portfolio of more than 30 widely recognized brands. The company delivered results for the full year and the fourth quarter in line with our expectations and reflective of continued softness in the shooting sports market. Our financial results also reflect the spin-off of Vista Outdoor from ATK, incremental standalone company costs, stock-based compensation charges, and transaction-related expenses. We are making key strategic investments in FY16 related to our marketing, product development, sales, IT, sourcing and the consolidation of some warehousing facilities. These investments will position Vista Outdoor to deliver future enhanced performance, growth and long-term value creation.

Chief Financial Officer Stephen Nolan said:

We expect to continue to show a year-over-year decline in the first two quarters of the year, particularly in the first quarter, compared to the same period in fiscal year 2015. Last year, the company recorded one of the highest first quarters for sales in the history of the business. Consistent with what we’ve previously communicated, we expect to return to growth late in fiscal year 2016, resulting in low single-digit growth for the full fiscal year, notwithstanding significant headwinds related to effects from foreign exchange translation.

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Again, investors have to have slightly different expectations of companies that are involved in the gun trade, looking at Vista Outdoor on a raw basis without considering the leadership position in a volatile consumer sector. The gun trade has different economics than other consumer spending habits, full of big hits and big misses.

Vista Outdoor shares were down almost 6% at $41.40, against a post-ATK trading range of $37.00 to $46.56. The consensus analyst target price was $51.00 ahead of the report.

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