Smith & Wesson Brands, Inc. reported a loss in the fiscal first quarter ended July 31 as margins eroded, and sales declined 3.7 percent. Sales are expected to decline between 3 percent and 5 percent in the fiscal second quarter.

Financial Highlights

  • Net sales were $85.1 million, a decrease of $3.3 million, or 3.7 percent, from the comparable quarter last year.
  • Gross margin was 25.9 percent compared with 27.4 percent in the comparable quarter last year.
  • GAAP net loss was $3.4 million, or 8 cents 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 8 cents per diluted share, compared with $881,000, 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.
  • Non-GAAP adjusted EBITDAS was $8.0 million, or 9.5 percent of net sales, compared with $10.2 million, or 11.8 percent 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 percent 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 percent from the end of the prior quarter and by over 13 percent 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 to 5 percent 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.”

Image courtesy Smith & Wesson