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Smith & Wesson Brands, Inc. Reports Second Quarter Fiscal 2026 Financial Results

Press Release
Thursday at 5:05pm AST · December 4, 2025 11 min read

  • Q2 Net Sales of $124.7 Million
  • Q2 Gross Margin of 24.3%
  • Q2 EPS of $0.04/Share; Q2 Adjusted EPS of $0.04/Share
  • Q2 Net Income of $1.9 million; Q2 Adjusted EBITDAS of $15.1 Million
  • Q2 Net Cash Provided by Operating Activities of $27.3 million

Maryville, Tennessee–(Newsfile Corp. – December 4, 2025) – Smith & Wesson Brands, Inc. (NASDAQ: SWBI), a U.S.-based leader in firearm manufacturing and design, today announced financial results for the second quarter of fiscal 2026, ended October 31, 2025.

Second Quarter Fiscal 2026 Financial Highlights

  • Net sales were $124.7 million, a decrease of $5.0 million, or 3.9%, from the comparable quarter last year.

  • Gross margin was 24.3% compared with 26.6% in the comparable quarter last year.

  • GAAP net income was $1.9 million, or $0.04 per diluted share, compared with $4.5 million, or $0.10 per diluted share, for the comparable quarter last year.

  • Non-GAAP net income was $2.0 million, or $0.04 per diluted share, compared with $5.2 million, or $0.12 per diluted share, for the comparable quarter last year. GAAP to non-GAAP adjustments for net income exclude costs related to the relocation and the grand opening of the Smith & Wesson Academy. For a detailed reconciliation, see the schedules that follow in this release.

  • Non-GAAP Adjusted EBITDAS was $15.1 million, or 12.1% of net sales, compared with $19.1 million, or 15.0% of net sales, for the comparable quarter last year.

  • Net cash provided by operating activities was $27.3 million, an increase of $34.7 million over the comparable quarter last year.

Mark Smith, President and Chief Executive Officer, commented, “We were pleased with our second quarter results, which continue to demonstrate the strength of the Smith & Wesson brand, the ongoing success of our innovation strategy, and our disciplined focus on managing operations and allocating capital. As we anticipated, excellent efficiency in our business operations allowed us to deliver solid profitability of $15 million of Adjusted EBITDAS on net sales of nearly $125 million. We also saw great results on our balance sheet, with a significant reduction in inventory thanks to our disciplined sales & operations planning process. This generated healthy operating cash flow of over $27 million in the quarter. Further, our new products continued to be a significant catalyst, accounting for 38.7% of sales in the quarter.”

Deana McPherson, Executive Vice President and Chief Financial Officer, commented, “Distributor inventory in terms of actual units declined by over 5% from the end of the prior quarter and by 15% compared with the end of October 2024. This indicates continued positive sell through of our products at retail and a good position for us as we look forward to the coming months. Although we continue to see uncertainty regarding macro-economic conditions, including tariffs, we believe that the strength of our brand, product assortment, and new product offerings should allow us to continue performing well. Therefore, we expect our third quarter sales will be 8-10% over our Q3 fiscal 2025 sales with no significant impact, either positively or negatively, from channel inventory. 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 December 18, 2025 with payment to be made on January 2, 2026.”

Conference Call and Webcast

The company will host a conference call and webcast on December 4, 2025 to discuss its second 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. The conference call audio webcast can also be accessed live 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 expense, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) an accrued legal settlement, (vi) Smith & Wesson Academy grand opening expenses, (vii) relocation expense, and (viii) 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 our 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. Additionally, the company provides manufacturing services such as forging and machining to third parties and offers world-class firearm training programs to Law Enforcement/Military departments and civilians at the Smith & Wesson Academy™ in Maryville, TN. For more information call (844) 363-5386 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) distributor inventory trends indicate continued positive sell through of our products at retail and a good position for us as we look forward to the coming months; (ii) although we continue to see uncertainty regarding macro-economic conditions, including tariffs, we believe that the strength of our brand, product assortment, and new product offerings should allow us to continue performing well; and (iii) we expect our third quarter sales will be 8-10% over our Q3 fiscal 2025 sales with no significant impact, either positively or negatively, from channel inventory. 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 and 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
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
As of:
October 31,
2025		   April 30, 
2025
(In thousands, except par value and share data)
ASSETS
Current assets:  
Cash and cash equivalents $ 22,431   $ 25,231
Marketable securities 4,890   –
Accounts receivable, net of allowances for credit losses of $5 on
October 31, 2025 and April 30, 2025		 45,834   55,868
Inventories 183,141   189,840
Prepaid expenses and other current assets 9,655   6,260
Income tax receivable 2,569   66
Total current assets 268,520   277,265
Property, plant, and equipment, net of accumulated depreciation and
amortization of $384,186 on October 31, 2025 and $368,811 on April 30, 2025		 242,082   242,648
Intangibles, net 2,278   2,409
Goodwill 19,024   19,024
Deferred income taxes 9,584   10,260
Other assets 7,094   8,006
Total assets $ 548,582   $ 559,612
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:      
Accounts payable $ 23,485   $ 26,887
Accrued expenses and deferred revenue 18,658   24,678
Accrued payroll and incentives 10,303   9,060
Accrued profit sharing 204   4,636
Accrued warranty 1,241   1,379
Total current liabilities 53,891   66,640
Notes and loans payable 88,992   79,096
Finance lease payable, net of current portion 32,806   33,703
Other non-current liabilities 9,697   7,719
Total liabilities 185,386   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,
76,168,890 issued and 44,490,896 shares outstanding on October 31,
2025 and 75,789,455 shares issued and 44,111,461 shares
outstanding on April 30, 2025		 76   76
Additional paid-in capital 301,933   298,075
Retained earnings 519,462   532,615
Treasury stock, at cost (31,677,994 shares on October 31, 2025 and
April 30, 2025)		 (458,275 )   (458,312 )
Total stockholders’ equity 363,196   372,454
Total liabilities and stockholders’ equity $ 548,582   $ 559,612

 

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended 
October 31,		   For the Six Months Ended 
October 31,
2025   2024   2025   2024
(In thousands, except per share data)
Net sales $ 124,670   $ 129,679   $ 209,748   $ 218,013
Cost of sales 94,321   95,175   157,324   159,322
Gross profit 30,349   34,504   52,424   58,691
Operating expenses:              
Research and development 2,433   2,221   5,440   4,736
Selling, marketing, and distribution 10,336   9,613   19,088   19,503
General and administrative 13,465   15,214   26,781   28,579
Gain on sale/disposition of assets, net –   (81 )   (43 )   (139 )
Total operating expenses 26,234   26,967   51,266   52,679
Operating income 4,115   7,537   1,158   6,012
Other expense, net:              
Other income/(expense), net 277   (5 )   338   (11 )
Interest expense, net (1,385 )   (1,419 )   (2,590 )   (2,152 )
Total other expense, net (1,108 )   (1,424 )   (2,252 )   (2,163 )
Income/(loss) before income taxes 3,007   6,113   (1,094 )   3,849
Income tax expense 1,090   1,567   400   1,158
Net income/(loss) $ 1,917   $ 4,546   $ (1,494 )   $ 2,691
Net income/(loss) per share:              
Basic – net income/(loss) $ 0.04   $ 0.10   $ (0.03 )   $ 0.06
Diluted – net income/(loss) $ 0.04   $ 0.10   $ (0.03 )   $ 0.06
Weighted average number of common shares outstanding:              
Basic 44,396   44,523   44,329   44,922
Diluted 44,737   44,935   44,329   45,404

 

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended 
October 31,
2025   2024
(In thousands)
Cash flows from operating activities:  
Net (loss)/income $ (1,494 )   $ 2,691
Adjustments to reconcile net (loss)/income to net cash provided by/(used) in
operating activities:		      
Depreciation and amortization 16,465   16,261
Gain on sale/disposition of assets (43 )   (139 )
Deferred income taxes 676   245
Stock-based compensation expense 3,990   3,722
Non-cash sublease income (889 )   (854 )
Other, net (317 )   –
Changes in operating assets and liabilities:      
Accounts receivable 10,034   6,364
Inventories 6,699   (35,535 )
Prepaid expenses and other current assets (3,395 )   (5,139 )
Income taxes (2,503 )   (5,632 )
Accounts payable (3,016 )   (10,135 )
Accrued payroll and incentives 1,243   (3,949 )
Accrued profit sharing (4,432 )   (8,048 )
Accrued expenses and deferred revenue (3,425 )   1,826
Accrued warranty (138 )   (328 )
Other assets 40   665
Other non-current liabilities (337 )   (227 )
Net cash provided by/(used) in operating activities 19,158   (38,212 )
Cash flows from investing activities:      
Purchases of marketable securities (4,573 )   –
Payments to acquire patents and software (54 )   (112 )
Proceeds from sale of property and equipment 49   237
Payments to acquire property and equipment (15,281 )   (8,004 )
Net cash used in investing activities (19,859 )   (7,879 )
Cash flows from financing activities:      
Proceeds from loans and notes payable 20,000   60,000
Cash paid for debt issuance costs (219 )   (941 )
Payments on finance lease obligation (93 )   (89 )
Payments on notes and loans payable (10,000 )   –
Payments to acquire treasury stock –   (22,620 )
Dividend distribution (11,655 )   (11,652 )
Proceeds to acquire common stock from employee stock purchase plan 743   749
Payment of employee withholding tax related to restricted stock units (875 )   (1,102 )
Net cash (used in)/provided by financing activities (2,099 )   24,345
Net decrease in cash and cash equivalents (2,800 )   (21,746 )
Cash and cash equivalents, beginning of period 25,231   60,839
Cash and cash equivalents, end of period $ 22,431   $ 39,093
Supplemental disclosure of cash flow information      
Cash paid for:      
Interest, net of amounts capitalized $ 2,855   $ 2,353
Income taxes $ 2,293   $ 6,785

 

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   For the Six Months Ended
October 31, 2025   October 31, 2024   October 31, 2025   October 31, 2024
$ % of Sales   $   % of Sales   $   % of Sales   $   % of Sales
GAAP net sales $ 124,670     $ 129,679       $ 209,748       $ 218,013    
Relocation –     (2,554 )       –       (4,213 )    
Non-GAAP net sales $ 124,670     $ 127,125       $ 209,748       $ 213,800    
                           
GAAP gross profit $ 30,349 24.3%   $ 34,504   26.6%   $ 52,424   25.0%   $ 58,691   26.9%
Relocation expenses (89 )     552       (4 )       1,734    
Settlement –     70       –       70    
Non-GAAP gross profit $ 30,260 24.3%   $ 35,126   27.6%   $ 52,420   25.0%   $ 60,495   28.3%
                           
GAAP operating expenses $ 26,234 21.0%   $ 26,967   20.8%   $ 51,266   24.4%   $ 52,679   24.2%
Relocation expenses 309     (312 )       362       (437 )    
S&W Academy grand opening (486 )     –       (486 )       –    
Non-GAAP operating expenses $ 26,057 20.9%   $ 26,655   21.0%   $ 51,142   24.4%   $ 52,242   24.4%
                           
GAAP operating income $ 4,115 3.3%   $ 7,537   5.8%   $ 1,158   0.6%   $ 6,012   2.8%
Settlement –     70       –       70    
Relocation expenses (398 )     864       (366 )       2,171    
S&W Academy grand opening 486     –       486       –    
Non-GAAP operating income $ 4,203 3.4%   $ 8,471   6.7%   $ 1,278   0.6%   $ 8,253   3.9%
                           
GAAP net income/(loss) $ 1,917 1.5%   $ 4,546   3.5%   $ (1,494 )   -0.7%   $ 2,691   1.2%
Settlement –     70       –       70    
Relocation expenses (398 )     864       (366 )       2,171    
S&W Academy grand opening 486     –       486       –    
Tax effect of non-GAAP adjustments (25 )     (239 )       (34 )       (674 )    
Non-GAAP net income/(loss) $ 1,980 1.6%   $ 5,241   4.1%   $ (1,408 )   -0.7%   $ 4,258   2.0%
                           
GAAP net income/(loss) per share – diluted $ 0.04     $ 0.10       $ (0.03 )       $ 0.06    
Settlement –     –       –       –    
Relocation expenses (0.01 )     0.02       (0.01 )       0.05    
S&W Academy grand opening 0.01     –       0.01       –    
Tax effect of non-GAAP adjustments –     (0.01 )       –       (0.01 )    
Non-GAAP net income/(loss) per share – diluted $ 0.04     $ 0.12   (a)   $ (0.03 )       $ 0.09   (a)
                           
(a) Non-GAAP net loss per share does not foot due to rounding.

 

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EBITDAS 
(In thousands)   
(Unaudited)   
             
For the Three Months Ended   For the Six Months Ended
October 31, 2025   October 31, 2024   October 31, 2025   October 31, 2024
     
GAAP net income/(loss) $ 1,917   $ 4,546   $ (1,494 )   $ 2,691
Interest expense 1,982   2,080   3,819   3,527
Income tax expense 1,090   1,567   400   1,158
Depreciation and amortization 7,965   8,181   16,349   16,206
Stock-based compensation expense 2,099   1,869   3,990   3,722
S&W Academy grand opening 486   –   486   –
Settlement –   70   –   70
Relocation expense (398 )   738   (366 )   1,913
Non-GAAP Adjusted EBITDAS $ 15,141   $ 19,051   $ 23,184   $ 29,287
Non-GAAP Adjusted EBITDAS Margin 12.1%   15.0%   11.1%   13.7%

 

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES
RECONCILIATION OF NET CASH (USED IN) / PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW 
 (In thousands)
 (Unaudited)
       
For the Three Months Ended   For the Six Months Ended
October 31, 2025   October 31, 2024   October 31, 2025   October 31, 2024
Net cash provided by/(used in) operating activities $ 27,268   (7,397 )   $ 19,158   $ (38,212 )
Payments to acquire property and equipment (10,990 )   (3,302 )   (15,281 )   (8,004 )
Free cash flow $ 16,278   $ (10,699 )   $ 3,877   $ (46,216 )

 

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/276853

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