Smith & Wesson Brands, Inc. (SWBI) Q4 2026 Earnings Call Transcript
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Source: SeekingAlpha
Net Sales Net sales increased nearly 27% year over year, reaching $178.4 million, driven by strong consumer demand for handguns and a short-term increase in long gun demand.
Adjusted EBITDAS Adjusted EBITDAS increased 31.7% year over year, attributed to operational execution and market share growth.
Adjusted EPS Adjusted EPS was up nearly 77% year over year, reflecting higher net sales and gross margin.
Cash from Operations Cash from operations increased by nearly $34 million compared to last year, totaling $74.6 million for the quarter, due to strong sales and operational efficiency.
Full Fiscal Year Revenue Top line revenue was up over 10% year-over-year for the full fiscal year, driven by market share growth and innovation.
Full Fiscal Year Adjusted EPS Adjusted EPS increased more than 25% year-over-year for the full fiscal year, reflecting improved profitability.
Full Fiscal Year Adjusted EBITDA Adjusted EBITDA was up 7% year-over-year for the full fiscal year, supported by operational improvements.
Debt Reduction Debt was reduced from $80 million at the end of fiscal 2025 to $20 million at the end of fiscal 2026, reflecting a $60 million reduction due to strong cash generation.
Handgun Shipments Handgun unit shipments into the sporting goods channel surged 23% year-over-year, compared to a NICS increase of only 1.1%, indicating strong consumer demand and market share capture.
Long Gun Shipments Long gun unit shipments into the sporting goods channel increased 28.7% year-over-year, compared to a NICS increase of 3.5%, driven by growth in the MSR category.
Gross Margin Gross margin increased by 1 percentage point to 29.8%, driven by a 23% increase in production volume, lower promotions, and a 2%-3% price increase, partially offset by higher tariffs and inventory reserves.
Operating Expenses Operating expenses increased by $4.3 million year-over-year to $31.7 million, due to higher profit-related compensation costs, freight-related costs, and R&D expenses.
Net Income Net income increased by $7.6 million year-over-year to $16.2 million, driven by higher net sales and gross margin, partially offset by increased compensation costs.
Earnings Per Share (EPS) Earnings per share increased from $0.19 to $0.36 year-over-year, reflecting improved profitability.
Internal Inventory Internal inventory decreased from $190 million to $156 million year-over-year, reflecting efficient inventory management.
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Analyst Views on SWBI
Wall Street analysts forecast SWBI stock price to fall
2 Analyst Rating
1 Buy
1 Hold
0 Sell
Moderate Buy
Current: 13.730
Low
11.00
Averages
11.00
High
11.00
Current: 13.730
Low
11.00
Averages
11.00
High
11.00
About SWBI
Smith & Wesson Brands, Inc. is a manufacturer and designer of firearms. The Company is engaged in delivering a portfolio of handgun, long gun, and suppressor products to the global consumer and professional markets under the Smith & Wesson and Gemtech brands. It sells its products to a variety of customers, including firearm enthusiasts, collectors, hunters, sportsmen, competitive shooters, individuals desiring home and personal protection, law enforcement and security agencies and officers, and military agencies in the United States and throughout the world. It also provides forging and machining services to third parties. It manufactures its products at its facilities in Maryville, Tennessee; Springfield, Massachusetts, and Houlton, Maine. Its products include BodyGuard 2.0, a micro handgun concealed carry pistol; several variants of its Model 1854 Lever-Action Rifle series; M&P FPC in 40 caliber and 10mm; the CSX E-Series; no-lock Classic revolvers and Ultimate Carry revolvers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Smith & Wesson Reports Strong Gun Sales Growth
- Significant Sales Growth: Smith & Wesson Brands (SWBI) reported a 27% increase in net revenue driven by strong handgun sales during the quarter, indicating robust performance in the firearms market, with expectations for continued growth into FY27.
- Positive Market Reaction: SWBI's stock surged over 24% on Thursday, while other gun manufacturers like Sturm, Ruger & Company (RGR) and American Outdoor Brands (AOUT) saw gains of 5% to 6%, reflecting optimistic sentiment towards the firearms industry.
- Sustained Demand: CEO Mark Smith noted that despite typical lower summer demand, handgun shipments have outpaced federal background check data, suggesting strong market demand, with Q1 expected to significantly outperform last year's results.
- Optimistic Industry Outlook: CFO Deana McPherson indicated that firearm demand in FY27 is expected to be slightly higher than FY26, driven by upcoming state regulations and consumer preferences for micro-compact pistols, further propelling industry growth.
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- Smith & Wesson Performance: Smith & Wesson's stock surged approximately 20% after reporting earnings and revenue beats, with handgun sales increasing 23% year-over-year, highlighting strong demand in the firearms market.
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- Earnings Beat: Smith & Wesson Brands (SWBI) reported a Q4 non-GAAP EPS of $0.36, exceeding market estimates by $0.13, which significantly boosts investor confidence in the company's profitability.
- Significant Revenue Growth: The company achieved Q4 revenue of $178.4 million, surpassing market expectations by $23.13 million, with full-year net sales reaching $523.8 million, reflecting a 10.4% increase that underscores effective sales strategies and strong market demand.
- Strong Handgun Sales: Handgun shipments accounted for over 80% of total units shipped, with a 23.2% year-over-year increase in sales through the sporting goods channel, indicating robust consumer preference and solidifying the company's market position.
- Shareholder Return Plan: The board authorized a quarterly dividend of $0.13 per share, payable on July 15, 2026, demonstrating the company's commitment to creating long-term shareholder value while anticipating mid-single-digit revenue growth in fiscal 2027.
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Smith & Wesson Declares Quarterly Dividend of $0.13
- Quarterly Dividend Announcement: Smith & Wesson has declared a quarterly dividend of $0.13 per share, consistent with previous distributions, indicating stable cash flow and profitability, which is likely to attract more investor interest.
- Dividend Payment Timeline: The dividend will be payable on July 15, with a record date of July 1 and an ex-dividend date also on July 1, ensuring shareholders receive their returns promptly and bolstering shareholder confidence.
- Future Revenue Expectations: The company anticipates mid-single-digit revenue growth for FY 2027, reflecting its competitive position in the market and ongoing business development potential, which may enhance long-term shareholder returns.
- Capital Expenditure Plans: Smith & Wesson plans approximately $20 million in incremental capital expenditures in Springfield, aimed at enhancing production capacity and technological innovation, thereby supporting future growth strategies.
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- Strong Individual Stock Performances: Rumble (RUM.O) surged 16.2% after rebranding to RUM Group and closing its acquisition of German AI cloud company Northern Data; Smith & Wesson (SWBI.O) saw a 16.6% increase following a rise in fourth-quarter sales, highlighting robust performances among individual companies.
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Smith & Wesson Reports Strong Gun Sales Growth
- Significant Sales Growth: Smith & Wesson Brands (SWBI) reported a 27% increase in net revenue driven by strong handgun sales during the quarter, indicating robust performance in the firearms market, with expectations for continued growth into FY27.
- Positive Market Reaction: SWBI's stock surged over 24% on Thursday, while other gun manufacturers like Sturm, Ruger & Company (RGR) and American Outdoor Brands (AOUT) saw gains of 5% to 6%, reflecting optimistic sentiment towards the firearms industry.
- Sustained Demand: CEO Mark Smith noted that despite typical lower summer demand, handgun shipments have outpaced federal background check data, suggesting strong market demand, with Q1 expected to significantly outperform last year's results.
- Optimistic Industry Outlook: CFO Deana McPherson indicated that firearm demand in FY27 is expected to be slightly higher than FY26, driven by upcoming state regulations and consumer preferences for micro-compact pistols, further propelling industry growth.
See More
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- AI-Related Stocks Rally: Stocks tied to artificial intelligence and data center infrastructure saw significant gains, with Corning up 7% and Credo Technology rising 5%, reflecting ongoing investor optimism in AI technologies.
- Kroger Earnings Miss: Kroger reported first-quarter earnings of $1.58 per share, slightly below analysts' expectations of $1.59, resulting in a more than 6% drop in stock price, despite revenue of $46.12 billion exceeding forecasts.
- Smith & Wesson Performance: Smith & Wesson's stock surged approximately 20% after reporting earnings and revenue beats, with handgun sales increasing 23% year-over-year, highlighting strong demand in the firearms market.
See More
Smith & Wesson Reports Strong Q4 Earnings, Shares Surge
- Earnings Beat: Smith & Wesson Brands (SWBI) reported a Q4 non-GAAP EPS of $0.36, exceeding market estimates by $0.13, which significantly boosts investor confidence in the company's profitability.
- Significant Revenue Growth: The company achieved Q4 revenue of $178.4 million, surpassing market expectations by $23.13 million, with full-year net sales reaching $523.8 million, reflecting a 10.4% increase that underscores effective sales strategies and strong market demand.
- Strong Handgun Sales: Handgun shipments accounted for over 80% of total units shipped, with a 23.2% year-over-year increase in sales through the sporting goods channel, indicating robust consumer preference and solidifying the company's market position.
- Shareholder Return Plan: The board authorized a quarterly dividend of $0.13 per share, payable on July 15, 2026, demonstrating the company's commitment to creating long-term shareholder value while anticipating mid-single-digit revenue growth in fiscal 2027.
See More
Smith & Wesson Declares Quarterly Dividend of $0.13
- Quarterly Dividend Announcement: Smith & Wesson has declared a quarterly dividend of $0.13 per share, consistent with previous distributions, indicating stable cash flow and profitability, which is likely to attract more investor interest.
- Dividend Payment Timeline: The dividend will be payable on July 15, with a record date of July 1 and an ex-dividend date also on July 1, ensuring shareholders receive their returns promptly and bolstering shareholder confidence.
- Future Revenue Expectations: The company anticipates mid-single-digit revenue growth for FY 2027, reflecting its competitive position in the market and ongoing business development potential, which may enhance long-term shareholder returns.
- Capital Expenditure Plans: Smith & Wesson plans approximately $20 million in incremental capital expenditures in Springfield, aimed at enhancing production capacity and technological innovation, thereby supporting future growth strategies.
See More
Intel Partners with Apple for Chip Manufacturing in the U.S.
- Intel Stock Surge: Intel's shares soared nearly 9% after President Trump announced a deal with Apple for chip design and manufacturing in the U.S., which is expected to enhance the competitiveness of the American semiconductor industry.
- Chip Sector Rally: Following Intel's announcement, chipmakers experienced a broad rally, with Marvell Technology rising nearly 7% and both Lam Research and Applied Materials increasing about 5%, indicating optimistic market sentiment towards the semiconductor sector.
- Smith & Wesson Strong Performance: Gunmaker Smith & Wesson reported earnings and revenue beats, leading to a 14% stock increase, with handgun sales up 23% year-over-year, representing 80% of total units shipped in the quarter, reflecting robust market demand.
- Accenture Acquisition Impact: Accenture's stock fell 13% after announcing its acquisition of asset intelligence company runZero and cybersecurity firm Dragos, with the combined deal valued at approximately $4.175 billion, raising concerns about the company's acquisition strategy.
See More
U.S. Stock Futures Rebound as Tech Shares Gain on Peace Deal Optimism
- Tech Stock Surge: Intel's (INTC.O) shares rose 9.3% in premarket trading due to optimism surrounding a Middle East peace deal, alleviating concerns about a hawkish Federal Reserve under new Chair Warsh and boosting overall market sentiment.
- Market Expectation Shift: The CME Group's FedWatch tool indicates a 50% chance of a 25-bps rate hike in September, up from 27% on Wednesday, reflecting a divergence in investor views regarding future monetary policy.
- Positive Economic Data: Recent data showed U.S. retail sales in May exceeded expectations, with households increasing spending on cars and other vehicles despite rising gasoline prices, indicating economic resilience and further supporting market confidence.
- Strong Individual Stock Performances: Rumble (RUM.O) surged 16.2% after rebranding to RUM Group and closing its acquisition of German AI cloud company Northern Data; Smith & Wesson (SWBI.O) saw a 16.6% increase following a rise in fourth-quarter sales, highlighting robust performances among individual companies.
See More
