Smith & Wesson Brands, Inc. Reports First Quarter Fiscal 2026 Financial Results
- Q1 Net Sales of $85.1 Million
- Q1 Gross Margin of 25.9%; Non-GAAP Gross Margin of 26.0%
- Q1 Net Loss of $0.08/Share
Maryville, Tennesse--(Newsfile Corp. - September 4, 2025) - Smith & Wesson Brands, Inc. (NASDAQ: SWBI), a U.S.-based leader in firearm manufacturing and design, today announced financial results for the first quarter fiscal year 2026, ended July 31, 2025.
Financial Highlights
Net sales were $85.1 million, a decrease of $3.3 million, or 3.7%, from the comparable quarter last year.
Gross margin was 25.9% compared with 27.4% in the comparable quarter last year.
GAAP net loss was $3.4 million, or $0. 08 per diluted share, compared with $1.9 million, or $0.04 per diluted share, for the comparable quarter last year.
Non-GAAP net loss was $3.4 million, or $0. 08 per diluted share, compared with $881 thousand, or $0.02 per diluted share, for the comparable quarter last year. GAAP to non-GAAP adjustments for income exclude costs related to the relocation. For a detailed reconciliation, see the schedules that follow in this release.
Non-GAAP Adjusted EBITDAS was $8.0 million, or 9.5% of net sales, compared with $10.2 million, or 11.8% of net sales, for the comparable quarter last year.
Mark Smith, President and Chief Executive Officer, commented, "First quarter results came in better than expected, reflecting robust demand for our new products and continued strong market share for our broader portfolio in every firearms category in which we compete. Our performance during the seasonal slow period for firearms demonstrates the strength of our brand and the ongoing success of our innovation strategy. Innovation remains a cornerstone of our strategy, with new products accounting for 37.3% of sales in the first quarter. With a strong pipeline of new products upcoming, we will continue to invest in innovation to keep the line fresh, and ensure we maintain our leadership position."
Deana McPherson, Executive Vice President and Chief Financial Officer, commented, "During the quarter, inventory at distributors declined by over 10% from the end of the prior quarter and by over 13% compared with the end of July 2024 in terms of actual units, indicating positive sell through of our products at retail and a good position for us as we look forward to the coming months. We expect a normal seasonal environment, causing our second fiscal quarter sales to grow significantly over the first quarter and to land roughly at 3-5% below the second quarter of fiscal 2025. Consistent with our capital allocation strategy, our board of directors has authorized a $0.13 per share quarterly dividend, which will be paid to stockholders of record on September 18, 2025 with payment to be made on October 2, 2025."
Conference Call and Webcast
The company will host a conference call and webcast on September 4, 2025 to discuss its first quarter fiscal 2026 financial and operational results. Speakers on the conference call will include Mark Smith, President and Chief Executive Officer, and Deana McPherson, Executive Vice President and Chief Financial Officer. The conference call may include forward-looking statements. The conference call and webcast will begin at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). Interested parties in North America are invited to participate by dialing 1-877-704-4453. Interested parties from outside North America are invited to participate by dialing 1-201-389-0920. Participants should dial in at least 10 minutes prior to the start of the call. A live and archived webcast of the event will be available on the company's website at www.smith-wesson.com under the Investor Relations section.
Reconciliation of U.S. GAAP to Non-GAAP Financial Measures
In this press release, certain non-GAAP financial measures, including "non-GAAP net income," "Adjusted EBITDAS," and "free cash flow" are presented. From time-to-time, we consider and use these supplemental measures of operating performance in order to provide the reader with an improved understanding of underlying performance trends. We believe it is useful for us and the reader to review, as applicable, both (1) GAAP measures that include (i) interest expense, (ii) income tax benefit, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) relocation expense, and (vi) the tax effect of non-GAAP adjustments; and (2) the non-GAAP measures that exclude such information. We present these non-GAAP measures because we consider them an important supplemental measure of our performance. Our definition of these adjusted financial measures may differ from similarly named measures used by others. We believe these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. These non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for our GAAP measures. The principal limitations of these measures are that they do not reflect our actual expenses and may thus have the effect of inflating its financial measures on a GAAP basis.
About Smith & Wesson Brands, Inc.
Smith & Wesson Brands, Inc. (NASDAQ: SWBI) is a U.S.-based leader in firearm manufacturing and design, delivering a broad portfolio of quality handgun, long gun, and suppressor products to the global consumer and professional markets under the iconic Smith & Wesson® and Gemtech® brands. The company also provides forging and machining services to third parties. For more information call (800) 331-0852 or visit www.smith-wesson.com.
Safe Harbor Statement
Certain statements contained in this press release may be deemed to be forward-looking statements under federal securities laws, and we intend that such forward-looking statements be subject to the safe-harbor created thereby. Such forward-looking statements include, among others, that (i) with a strong pipeline of new products upcoming, we will continue to invest in innovation to keep the line fresh, and ensure we maintain our leadership position; and (ii) we expect a normal seasonal environment, causing our second fiscal quarter sales to grow significantly over the first quarter and to land roughly at 3-5% below the second quarter of fiscal 2025. We caution that these statements are qualified by important risks, uncertainties, and other factors that could cause actual results to differ materially from those reflected by such forward-looking statements. Such factors include, among others, economic, social, political, legislative, and regulatory factors; the impact of tariffs; the potential for increased regulation of firearms and firearm-related products; actions of social activists that could have an adverse effect on our business; the impact of lawsuits; the demand for our products; the state of the U.S. economy in general and the firearm industry in particular; general economic conditions and consumer spending patterns; our competitive environment; the supply, availability and costs of raw materials and components; our anticipated growth and growth opportunities; our strategies; our ability to maintain and enhance brand recognition and reputation; our ability to effectively manage and execute the relocation; our ability to introduce new products; the success of new products; the potential for cancellation of orders from our backlog; and other risks detailed from time to time in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended April 30, 2025.
Contact:
investorrelations@smith-wesson.com
(413) 747-3448
SMITH &WESSON BRANDS, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
As of: | ||||||
July 31, 2025 | April 30, 2025 | |||||
(In thousands, except par value and share data) | ||||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 17,964 | $ | 25,231 | ||
Marketable securities | 3,219 | — | ||||
Accounts receivable, net of allowances for credit losses of $5 on | ||||||
July 31, 2025 and $5 on April 30, 2025 |
| 41,309 |
|
| 55,868 |
|
Inventories | 203,097 | 189,840 | ||||
Prepaid expenses and other current assets | 9,041 | 6,260 | ||||
Income tax receivable | 883 | 66 | ||||
Total current assets | 275,513 | 277,265 | ||||
Property, plant, and equipment, net of accumulated depreciation and | ||||||
amortization of $376,471 on July 31, 2025 and $368,811 on April 30, 2025 |
| 239,407 |
|
| 242,648 |
|
Intangibles, net | 2,370 | 2,409 | ||||
Goodwill | 19,024 | 19,024 | ||||
Deferred income taxes | 10,260 | 10,260 | ||||
Other assets | 8,059 | 8,006 | ||||
Total assets | $ | 554,633 | $ | 559,612 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities: |
|
| ||||
Accounts payable | $ | 21,225 | $ | 26,887 | ||
Accrued expenses and deferred revenue | 18,104 | 24,678 | ||||
Accrued payroll and incentives | 7,689 | 9,060 | ||||
Accrued profit sharing | 4,636 | 4,636 | ||||
Accrued warranty | 1,252 | 1,379 | ||||
Total current liabilities | 52,906 | 66,640 | ||||
Notes and loans payable | 94,147 | 79,096 | ||||
Finance lease payable, net of current portion | 33,257 | 33,703 | ||||
Other non-current liabilities | 9,944 | 7,719 | ||||
Total liabilities | 190,254 | 187,158 | ||||
Commitments and contingencies |
|
| ||||
Stockholders' equity: |
|
| ||||
Preferred stock, $0.001 par value, 20,000,000 shares authorized, no shares | ||||||
issued or outstanding |
| — |
|
| — |
|
Common stock, $0.001 par value, 100,000,000 shares authorized, | ||||||
75,988,368 issued and 44,310,374 shares outstanding on July 31, |
| 76 |
|
| 76 |
|
Additional paid-in capital | 299,175 | 298,075 | ||||
Retained earnings | 523,420 | 532,615 | ||||
Treasury stock, at cost (31,677,994 shares on July 31, 2025 and | ||||||
31,677,994 shares on April 30, 2025) |
| (458,292 | ) |
| (458,312 | ) |
Total stockholders' equity | 364,379 | 372,454 | ||||
Total liabilities and stockholders' equity | $ | 554,633 | $ | 559,612 | ||
SMITH & WESSON BRANDS, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended July 31, | ||||||
2025 | 2024 | |||||
(In thousands, except per share data) | ||||||
Net sales | $ | 85,077 | $ | 88,334 | ||
Cost of sales | 63,003 | 64,148 | ||||
Gross profit | 22,074 | 24,186 | ||||
Operating expenses: |
|
| ||||
Research and development | 3,007 | 2,515 | ||||
Selling, marketing, and distribution | 8,752 | 9,889 | ||||
General and administrative | 13,316 | 13,366 | ||||
Gain on sale/disposition of assets, net | (43 | ) | (58 | ) | ||
Total operating expenses | 25,032 | 25,712 | ||||
Operating loss | (2,958 | ) | (1,526 | ) | ||
Other expense, net: |
|
| ||||
Other income/(expense), net | 62 | (6 | ) | |||
Interest expense, net | (1,205 | ) | (732 | ) | ||
Total other expense, net | (1,143 | ) | (738 | ) | ||
Loss before income taxes | (4,101 | ) | (2,264 | ) | ||
Income tax benefit | (690 | ) | (409 | ) | ||
Net loss | $ | (3,411 | ) | $ | (1,855 | ) |
Net loss per share: |
|
| ||||
Basic - net loss | $ | (0.08 | ) | $ | (0.04 | ) |
Diluted - net loss | $ | (0.08 | ) | $ | (0.04 | ) |
Weighted average number of common shares outstanding: |
|
| ||||
Basic | 44,262 | 45,321 | ||||
Diluted | 44,262 | 45,321 | ||||
SMITH & WESSON BRANDS, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Ended July 31, | ||||||
2025 | 2024 | |||||
(In thousands) | ||||||
Cash flows from operating activities: | ||||||
Net loss | $ | (3,411 | ) | $ | (1,855 | ) |
Adjustments to reconcile net loss to net cash used in |
|
| ||||
operating activities: |
|
|
|
|
|
|
Depreciation and amortization | 8,436 | 8,048 | ||||
Gain on sale/disposition of assets | (43 | ) | (58 | ) | ||
Deferred income taxes | — | 84 | ||||
Stock-based compensation expense | 1,892 | 1,854 | ||||
Non-cash sublease income | (442 | ) | (425 | ) | ||
Other, net | (51 | ) | 5 | |||
Changes in operating assets and liabilities: |
|
| ||||
Accounts receivable | 14,559 | 11,307 | ||||
Inventories | (13,257 | ) | (29,315 | ) | ||
Prepaid expenses and other current assets | (2,781 | ) | (4,066 | ) | ||
Income taxes | (817 | ) | (688 | ) | ||
Accounts payable | (6,429 | ) | (11,740 | ) | ||
Accrued payroll and incentives | (1,371 | ) | (4,839 | ) | ||
Accrued profit sharing | — | 59 | ||||
Accrued expenses and deferred revenue | (4,092 | ) | 526 | |||
Accrued warranty | (127 | ) | (70 | ) | ||
Other assets | 23 | 313 | ||||
Other non-current liabilities | (199 | ) | 45 | |||
Net cash used in operating activities | (8,110 | ) | (30,815 | ) | ||
Cash flows from investing activities: |
|
| ||||
Purchases of marketable securities | (3,168 | ) | — | |||
Payments to acquire patents and software | (54 | ) | (21 | ) | ||
Proceeds from sale of property and equipment | 49 | 58 | ||||
Payments to acquire property and equipment | (4,291 | ) | (4,702 | ) | ||
Net cash used in investing activities | (7,464 | ) | (4,665 | ) | ||
Cash flows from financing activities: |
|
| ||||
Proceeds from loans and notes payable | 20,000 | 30,000 | ||||
Payments on finance lease obligation | (46 | ) | (44 | ) | ||
Payments on notes and loans payable | (5,000 | ) | — | |||
Payments to acquire treasury stock | — | (12,856 | ) | |||
Dividend distribution | (5,855 | ) | (5,886 | ) | ||
Payment of employee withholding tax related to restricted stock units | (792 | ) | (1,058 | ) | ||
Net cash provided by financing activities | 8,307 | 10,156 | ||||
Net decrease in cash and cash equivalents | (7,267 | ) | (25,324 | ) | ||
Cash and cash equivalents, beginning of period | 25,231 | 60,839 | ||||
Cash and cash equivalents, end of period | $ | 17,964 | $ | 35,515 | ||
Supplemental disclosure of cash flow information |
|
| ||||
Cash paid for: |
|
| ||||
Interest, net of amounts capitalized | $ | 1,288 | $ | 1,313 | ||
Income taxes | $ | 194 | $ | 361 | ||
SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
(Dollars in thousands, except per share data)
(Unaudited)
For the Three Months Ended | ||||||||||||
July 31, 2025 | July 31, 2024 | |||||||||||
$ | % of Sales | $ | % of Sales | |||||||||
GAAP net sales | $ | 85,077 |
| $ | 88,334 |
| ||||||
Relocation | — |
| (1,659 | ) |
| |||||||
Non-GAAP net sales | $ | 85,077 |
| $ | 86,675 |
| ||||||
|
|
|
| |||||||||
GAAP gross profit | $ | 22,074 | 25.9% | $ | 24,186 | 27.4% | ||||||
Relocation expenses | 85 |
| 1,182 |
| ||||||||
Non-GAAP gross profit | $ | 22,159 | 26.0% | $ | 25,368 | 29.3% | ||||||
|
|
|
| |||||||||
GAAP operating expenses | $ | 25,032 | 29.4% | $ | 25,712 | 29.1% | ||||||
Relocation expenses | 53 |
| (125 | ) |
| |||||||
Non-GAAP operating expenses | $ | 25,085 | 29.5% | $ | 25,587 | 29.5% | ||||||
|
|
|
| |||||||||
GAAP operating loss | $ | (2,958 | ) | -3.5% | $ | (1,526 | ) | -1.7% | ||||
Relocation expenses | 32 |
| 1,307 |
| ||||||||
Non-GAAP operating loss | $ | (2,926 | ) | -3.4% | $ | (219 | ) | -0.3% | ||||
|
|
|
| |||||||||
GAAP net loss | $ | (3,411 | ) | -4.0% | $ | (1,855 | ) | -2.1% | ||||
Relocation expenses | 32 |
| 1,307 |
| ||||||||
Tax effect of non-GAAP adjustments | (11 | ) |
| (333 | ) |
| ||||||
Non-GAAP net loss | $ | (3,390 | ) | -4.0% | $ | (881 | ) | -1.0% | ||||
|
|
|
| |||||||||
GAAP net loss per share - diluted | $ | (0.08 | ) |
| $ | (0.04 | ) |
| ||||
Relocation expenses | — |
| 0.03 |
| ||||||||
Tax effect of non-GAAP adjustments | — |
| (0.01 | ) |
| |||||||
Non-GAAP net loss per share - diluted | $ | (0.08 | ) |
| $ | (0.02 | ) | (a) | ||||
|
|
|
| |||||||||
(a) Non-GAAP net loss per share does not foot due to rounding. |
|
|
|
| ||||||||
SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP INCOME FROM OPERATIONS TO NON-GAAP ADJUSTED EBITDAS
(In thousands)
(Unaudited)
For the Three Months Ended | ||||||
July 31, 2025 | July 31, 2024 | |||||
GAAP net loss | $ | (3,411 | ) | $ | (1,855 | ) |
Interest expense | 1,837 | 1,446 | ||||
Income tax benefit | (690 | ) | (408 | ) | ||
Depreciation and amortization | 8,385 | 8,025 | ||||
Stock-based compensation expense | 1,892 | 1,854 | ||||
Relocation expense | 32 | 1,175 | ||||
Non-GAAP Adjusted EBITDAS | $ | 8,045 | $ | 10,237 | ||
|
| |||||
Non-GAAP Adjusted EBITDAS Margin | 9.5% | 11.8% | ||||
SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES
RECONCILIATION OF NET CASH USED IN OPERATING ACTIVITIES TO FREE CASH FLOW
(In thousands)
(Unaudited)
For the Three Months Ended | ||||||
July 31, 2025 | July 31, 2024 | |||||
Net cash used in operating activities | $ | (8,110 | ) | $ | (30,815 | ) |
Payments to acquire property and equipment | (4,291 | ) | (4,702 | ) | ||
Free cash flow | $ | (12,401 | ) | $ | (35,517 | ) |
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