Smith & Wesson Brands, Inc. (SWBI) Q1 2026 Earnings Call Transcript
Net Sales $85.1 million, a decrease of $3.3 million or 3.7% year-over-year, due to lower production and decreased absorption.
EBITDAS $8 million, reflecting robust demand for new products and strong market share.
Handgun Shipments Increased just over 35% year-over-year, driven by strength across several product lines like Bodyguard, Shield, and M&P.
Long Gun Shipments Decreased 28.1% year-over-year, reflecting divergent conditions in the shotgun and bolt-action rifle market versus the MSR and lever action markets.
Average Selling Prices (ASPs) Declined 6.1% sequentially; Handgun ASPs were down 4%, and Long Gun ASPs declined 13% due to mix.
Gross Margin 25.9%, a decrease of 1.5% year-over-year, primarily due to decreased absorption on lower production and a 120 basis point negative impact from tariffs.
Operating Expenses $25 million, $680,000 lower year-over-year, with increases in R&D offset by lower selling and marketing costs.
Net Loss $3.4 million or $0.08 loss per share, driven by lower revenue, decreased margin, and higher interest expense.
Cash Used in Operations $8.1 million, compared to $30.8 million in the prior year, due to a net working capital decrease of $24 million.
Inventory Increased $13.3 million during the quarter, compared to $29.3 million in the prior year.
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U.S. Considers Easing Gun Regulations, Impacting Major Gun Stocks
- Regulatory Changes Expected: The U.S. government may announce easing of gun regulations at the National Shooting Sports Foundation trade show, likely impacting major gun stocks like Smith & Wesson (SWBI) and Sturm, Ruger (RGR), potentially stimulating sales growth.
- Positive Market Reaction: As trading begins this week, retail sentiment has shifted to bullish for RGR and neutral for AOUT, indicating market optimism regarding potential policy changes and their implications for stock performance.
- Sales Growth Potential: Easing restrictions on private sales and exports is expected to boost firearm sales, likely leading to strong short-term performance for SWBI, RGR, and other related stocks, reflecting market sensitivity to regulatory changes.
- Political Context Impact: The Trump administration's intent to reverse Biden-era gun restrictions highlights the significance of gun policy in U.S. politics, potentially further driving growth in the firearms industry and increasing investor interest.
Smith & Wesson Surges After Strong FQ2 Performance Driven by New Products and Streamlined Inventory
Strong Q2 Performance: Smith & Wesson reported better-than-expected fiscal second quarter results, with a net sales of nearly $125 million and an adjusted profit of $0.04 per share, despite a year-over-year decline in earnings.
Product Launch Success: New products contributed to nearly 40% of total quarterly sales, and the company anticipates a sales growth of 8% to 10% in the upcoming third quarter, driven by strong holiday season expectations.
Stock Market Reaction: Shares of Smith & Wesson surged nearly 17% following the earnings report, positively impacting the stock prices of peers like Sturm, Ruger & Co and American Outdoor Brands.
Operational Efficiency: The company achieved solid profitability with an EBITDAS of $15 million, although gross and operating margins were compressed compared to the previous year.
Smith & Wesson anticipates 8%–10% sales growth in Q3, driven by inventory cuts and strong new product performance.
Management Performance: Smith & Wesson reported solid profitability with $15 million in EBITDAS on nearly $125 million in net sales, driven by new products making up 40% of sales and a significant reduction in inventory.
Financial Outlook: The company anticipates Q3 sales growth of 8% to 10% over the previous year, with expectations for improved gross margins and continued healthy cash generation, despite potential tariff impacts.
Operational Efficiency: Management emphasized disciplined cost management and operational efficiency, noting a decrease in operating expenses and a clean channel inventory, positioning the company well for the busy second half of the fiscal year.
Market Sentiment: Analysts maintained a neutral tone, focusing on input costs and margin visibility, while management expressed confidence in product momentum and brand strength, despite ongoing macroeconomic uncertainties.
Significant Options Activity on Thursday: C, SWBI, BLK
Smith & Wesson Options Trading: Smith & Wesson Brands Inc (SWBI) experienced significant options trading with 2,936 contracts, particularly for the $8 strike put option expiring December 19, 2025, which saw 1,171 contracts traded.
Blackrock Options Trading: Blackrock Inc (BLK) also had notable options activity, with 3,695 contracts traded, especially for the $1040 strike call option expiring December 05, 2025, which had 471 contracts traded.
Trading Volume Comparison: The options trading volumes for both companies represented over 60% of their average daily trading volumes over the past month, indicating heightened investor interest.
Further Information: For more details on available expirations for options related to SWBI, BLK, or other companies, StockOptionsChannel.com can be visited.
Suspect in D.C. National Guard Shooting Enters Not Guilty Plea at Initial Court Appearance
Accused Shooter's Court Appearance: Rahmanullah Lakanwal, 29, accused of shooting two National Guard members near the White House, pleaded not guilty to first-degree murder and other gun charges during a virtual court appearance from his hospital bed.
Details of the Incident: The shooting incident occurred on November 26, during which Lakanwal was also injured and is currently recovering under heavy guard in the hospital.
Suspect in D.C. Shooting Facing First-Degree Murder Charges
Murder Charges: Prosecutors are preparing to charge Rahmanullah Lakanwal with first-degree murder in connection with the death of National Guard member Sarah Beckstrom.
Incident Details: Beckstrom was shot and killed while on duty in Washington, D.C., prompting the upgrade of initial assault charges to murder.
Prosecutorial Statements: D.C.’s U.S. Attorney Jeanine Pirro indicated that more charges are expected to follow in this case.
Media Coverage: The developments were discussed during a Fox News interview, highlighting the seriousness of the charges against Lakanwal.
U.S. Considers Easing Gun Regulations, Impacting Major Gun Stocks
- Regulatory Changes Expected: The U.S. government may announce easing of gun regulations at the National Shooting Sports Foundation trade show, likely impacting major gun stocks like Smith & Wesson (SWBI) and Sturm, Ruger (RGR), potentially stimulating sales growth.
- Positive Market Reaction: As trading begins this week, retail sentiment has shifted to bullish for RGR and neutral for AOUT, indicating market optimism regarding potential policy changes and their implications for stock performance.
- Sales Growth Potential: Easing restrictions on private sales and exports is expected to boost firearm sales, likely leading to strong short-term performance for SWBI, RGR, and other related stocks, reflecting market sensitivity to regulatory changes.
- Political Context Impact: The Trump administration's intent to reverse Biden-era gun restrictions highlights the significance of gun policy in U.S. politics, potentially further driving growth in the firearms industry and increasing investor interest.
Smith & Wesson Surges After Strong FQ2 Performance Driven by New Products and Streamlined Inventory
Strong Q2 Performance: Smith & Wesson reported better-than-expected fiscal second quarter results, with a net sales of nearly $125 million and an adjusted profit of $0.04 per share, despite a year-over-year decline in earnings.
Product Launch Success: New products contributed to nearly 40% of total quarterly sales, and the company anticipates a sales growth of 8% to 10% in the upcoming third quarter, driven by strong holiday season expectations.
Stock Market Reaction: Shares of Smith & Wesson surged nearly 17% following the earnings report, positively impacting the stock prices of peers like Sturm, Ruger & Co and American Outdoor Brands.
Operational Efficiency: The company achieved solid profitability with an EBITDAS of $15 million, although gross and operating margins were compressed compared to the previous year.
Smith & Wesson anticipates 8%–10% sales growth in Q3, driven by inventory cuts and strong new product performance.
Management Performance: Smith & Wesson reported solid profitability with $15 million in EBITDAS on nearly $125 million in net sales, driven by new products making up 40% of sales and a significant reduction in inventory.
Financial Outlook: The company anticipates Q3 sales growth of 8% to 10% over the previous year, with expectations for improved gross margins and continued healthy cash generation, despite potential tariff impacts.
Operational Efficiency: Management emphasized disciplined cost management and operational efficiency, noting a decrease in operating expenses and a clean channel inventory, positioning the company well for the busy second half of the fiscal year.
Market Sentiment: Analysts maintained a neutral tone, focusing on input costs and margin visibility, while management expressed confidence in product momentum and brand strength, despite ongoing macroeconomic uncertainties.
Significant Options Activity on Thursday: C, SWBI, BLK
Smith & Wesson Options Trading: Smith & Wesson Brands Inc (SWBI) experienced significant options trading with 2,936 contracts, particularly for the $8 strike put option expiring December 19, 2025, which saw 1,171 contracts traded.
Blackrock Options Trading: Blackrock Inc (BLK) also had notable options activity, with 3,695 contracts traded, especially for the $1040 strike call option expiring December 05, 2025, which had 471 contracts traded.
Trading Volume Comparison: The options trading volumes for both companies represented over 60% of their average daily trading volumes over the past month, indicating heightened investor interest.
Further Information: For more details on available expirations for options related to SWBI, BLK, or other companies, StockOptionsChannel.com can be visited.
Suspect in D.C. National Guard Shooting Enters Not Guilty Plea at Initial Court Appearance
Accused Shooter's Court Appearance: Rahmanullah Lakanwal, 29, accused of shooting two National Guard members near the White House, pleaded not guilty to first-degree murder and other gun charges during a virtual court appearance from his hospital bed.
Details of the Incident: The shooting incident occurred on November 26, during which Lakanwal was also injured and is currently recovering under heavy guard in the hospital.
Suspect in D.C. Shooting Facing First-Degree Murder Charges
Murder Charges: Prosecutors are preparing to charge Rahmanullah Lakanwal with first-degree murder in connection with the death of National Guard member Sarah Beckstrom.
Incident Details: Beckstrom was shot and killed while on duty in Washington, D.C., prompting the upgrade of initial assault charges to murder.
Prosecutorial Statements: D.C.’s U.S. Attorney Jeanine Pirro indicated that more charges are expected to follow in this case.
Media Coverage: The developments were discussed during a Fox News interview, highlighting the seriousness of the charges against Lakanwal.
