Smith & Wesson Brands, Inc. Reports Fourth Quarter and Full Fiscal 2025 Financial Results

Rhea-AI Summary

Smith & Wesson Brands (NASDAQ: SWBI) reported challenging Q4 and full fiscal 2025 results, with significant year-over-year declines. Q4 net sales decreased 11.6% to $140.8M, while Q4 GAAP net income fell to $8.6M ($0.19 per share) from $27.3M ($0.59 per share) year-over-year. Full-year fiscal 2025 showed net sales of $474.7M, down 11.4%, with GAAP net income of $13.4M ($0.30 per share) compared to $41.4M ($0.89 per share) in the previous year. The company attributed the weaker performance to macro-economic headwinds, including inflation, high interest rates, and tariff concerns affecting consumer discretionary spending. Despite challenges, the company announced a quarterly dividend of $0.13 per share, payable July 21, 2025, and maintains a strong market position through successful new product launches.

Positive

• Maintained leadership position in competitive firearm market segments through successful new products
• New products and lower price point offerings continue to perform well
• Company maintains quarterly dividend of $0.13 per share
• Partially offset bottom-line impact through disciplined cost management and flexible manufacturing

Negative

• Q4 net sales decreased 11.6% year-over-year to $140.8M
• Q4 gross margin declined to 28.8% from 35.5% year-over-year
• Full-year net sales dropped 11.4% to $474.7M
• GAAP net income fell 67.6% in Q4 to $8.6M from $27.3M year-over-year
• Company expects continued headwinds and similar demand levels in fiscal 2026

Insights

Financial Analyst

SWBI reports declining sales and profitability in Q4 and FY2025, citing macroeconomic headwinds impacting consumer discretionary spending.

Smith & Wesson's Q4 results reflect significant challenges, with $140.8 million in net sales representing an 11.6% year-over-year decline. The pressure extends beyond just the top line - gross margin contracted sharply to 28.8% from 35.5% in the comparable quarter. This margin compression is particularly concerning as it suggests both volume declines and potential pricing pressure.

The bottom line impact is substantial, with quarterly earnings per share dropping to $0.19 from $0.59 - a 67.8% decline. For the full year, diluted EPS fell to $0.30 from $0.89, a 66.3% decrease.

Management attributes the underperformance to macroeconomic headwinds including persistent inflation, high interest rates, and tariff concerns - all factors constraining consumer discretionary spending. The company is partially offsetting these challenges through cost management and its flexible manufacturing model, but the magnitude of the sales decline is overwhelming these efforts.

Looking forward, management projects firearms demand in fiscal 2026 to remain similar to 2025 levels, suggesting they don't anticipate a quick recovery. Their strategy appears focused on new product development and lower price point offerings, which are performing relatively well despite the challenging environment.

Despite the financial challenges, the company is maintaining its shareholder return policy with a quarterly dividend of $0.13 per share. This suggests management remains confident in the company's long-term financial stability, even as they navigate near-term challenges in the firearms market.

- Q4 Net Sales of $140.8 Million

- Q4 Gross Margin of 28.8%; Non-GAAP Gross Margin of 29.2%

- Q4 EPS of $0.19/Share

Maryville, Tennessee--(Newsfile Corp. - June 18, 2025) - Smith & Wesson Brands, Inc. (NASDAQ: SWBI), a U.S.-based leader in firearm manufacturing and design, today announced financial results for the fourth quarter and full fiscal year 2025, ended April 30, 2025.

Fourth Quarter Fiscal 2025 Financial Highlights

• Net sales were $140.8 million, a decrease of $18.4 million, or 11.6%, from the comparable quarter last year.

• Gross margin was 28.8% compared with 35.5% in the comparable quarter last year.

• GAAP net income was $8.6 million, or $0.19 per diluted share, compared with $27.3 million, or $0.59 per diluted share, for the comparable quarter last year.

• Non-GAAP net income was $9.0 million, or $0.20 per diluted share, compared with $22.1 million, or $0.48 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 $24.1 million, or 17.2% of net sales, compared with $37.6 million, or 23.6% of net sales, for the comparable quarter last year.

Full Year Fiscal 2025 Financial Highlights

• Net sales were $474.7 million, a decrease of $61.2 million, or 11.4%, from the prior fiscal year.

• Gross margin was 26.8% compared with 29.5% in the prior fiscal year.

• GAAP net income was $13.4 million, or $0.30 per diluted share, compared with $41.4 million, or $0.89 per diluted share, for the prior fiscal year.

• Non-GAAP net income was $14.6 million, or $0.33 per diluted share, compared with $44.4 million, or $0.96 per diluted share, for the prior fiscal year. GAAP to non-GAAP adjustments for income include costs related to the relocation, a gain on sale of certain real estate, and other costs. For a detailed reconciliation, see the schedules that follow in this release.

• Non-GAAP Adjusted EBITDAS was $67.3 million, or 14.3% of net sales, compared with $96.6 million, or 18.0% of net sales, for the prior fiscal year.

Mark Smith, President and Chief Executive Officer, commented, "Fourth quarter proved more difficult than we anticipated largely due to macro-economic and industry trends. While the combination of lower sales and production volumes, along with mix factors, pressured margins, we were able to partially offset the bottom-line impact through disciplined cost management and by leveraging our flexible manufacturing model. Looking at the overall firearms market, we continue to see consumers generally being cautious due to macro-economic factors pressuring discretionary spending. While new products and lower price point offerings are still performing well, overall conditions suggest headwinds will likely persist in the near term. Despite these challenges, we remain well positioned to succeed in this environment."

Deana McPherson, Executive Vice President and Chief Financial Officer, commented, "We believe that firearm market conditions have been negatively impacted by persistent inflation, high interest rates, and uncertainty caused by tariff concerns. That being said, the success of our new products has enabled us to maintain a leadership position in the categories of the firearm market in which we compete. We currently expect demand for firearms in fiscal 2026 to be similar to what we saw in fiscal 2025, remaining subject to economic headwinds such as inflation and the impact of tariff-related cost increases. 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 July 7, 2025 with payment to be made on July 21, 2025."

Conference Call and Webcast

The company will host a conference call and webcast on June 18, 2025 to discuss its fourth quarter and full fiscal 2025 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 expense, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) spin related stock-based compensation, (vi) an accrued legal settlement, (vii) a gain on sale of certain real estate, (viii) a gain on sale of intangible assets, (ix) Relocation expense, and (x) 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 Global Select: 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 respect to the overall firearms market, we continue to see consumers generally being cautious due to macro-economic factors pressuring discretionary spending; (ii) overall conditions suggest headwinds will likely persist in the near term; (iii) we remain well positioned to succeed in this environment; and (iv) we currently expect demand for firearms in fiscal 2026 to be similar to what we saw in fiscal 2025, remaining subject to economic headwinds such as inflation and the impact of tariff-related cost increases. 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
CONSOLIDATED BALANCE SHEETS
(Unaudited)

		As of:
		April 30, 2025			April 30, 2024
		(In thousands, except par value and share data)
ASSETS
Current assets:
Cash and cash equivalents	$	25,231		$	60,839
Accounts receivable, net of allowances for credit losses of $5 on
April 30, 2025 and $0 on April 30, 2024		55,868			59,071
Inventories		189,840			160,500
Prepaid expenses and other current assets		6,260			4,973
Income tax receivable		66			1,948
Total current assets		277,265			287,331
Property, plant, and equipment, net of accumulated depreciation and
amortization of $368,811 on April 30, 2025 and $352,615 on April 30, 2024		242,648			252,633
Intangibles, net		2,409			2,598
Goodwill		19,024			19,024
Deferred income taxes		10,260			7,228
Other assets		8,006			8,614
Total assets	$	559,612		$	577,428
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	26,887		$	41,831
Accrued expenses and deferred revenue		24,678			24,489
Accrued payroll and incentives		9,060			17,147
Accrued profit sharing		4,636			9,098
Accrued warranty		1,379			1,813
Total current liabilities		66,640			94,378
Notes and loans payable		79,096			39,880
Finance lease payable, net of current portion		33,703			35,404
Other non-current liabilities		7,719			7,852
Total liabilities		187,158			177,514
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,
75,789,455 issued and 44,111,461 shares outstanding on April 30, 2025 and 75,395,490 shares issued and 45,561,569 shares outstanding on April 30, 2024		76			75
Additional paid-in capital		298,075			289,994
Retained earnings		532,615			542,414
Accumulated other comprehensive income		—			73
Treasury stock, at cost (31,677,994 shares on April 30, 2025 and
29,833,921 shares on April 30, 2024)		(458,312)			(432,642)
Total stockholders' equity		372,454			399,914
Total liabilities and stockholders' equity	$	559,612		$	577,428

 

SMITH & WESSON BRANDS, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

		For the Three Months Ended April 30,						For the Year Ended April 30,
		2025			2024			2025			2024
		(In thousands, except per share data)
Net sales	$	140,762		$	159,148		$	474,661		$	535,833
Cost of sales		100,217			102,646			347,478			377,740
Gross profit		40,545			56,502			127,183			158,093
Operating expenses:
Research and development		1,962			1,774			9,567			7,258
Selling, marketing, and distribution		11,473			9,473			41,314			40,611
General and administrative		13,974			18,258			54,933			63,134
Gain on sale/disposition of assets, net		6			(10)			(2,515)			(11)
Total operating expenses		27,415			29,495			103,299			110,992
Operating income		13,130			27,007			23,884			47,101
Other (expense)/income, net:
Other (expense)/income, net		(6)			6,496			(17)			6,672
Interest expense, net		(748)			(607)			(4,622)			(2,055)
Total other (expense)/income, net		(754)			5,889			(4,639)			4,617
Income before income taxes		12,376			32,896			19,245			51,718
Income tax expense		3,742			5,561			5,820			10,356
Net income	$	8,634		$	27,335		$	13,425		$	41,362
Net income per share:
Basic - net income	$	0.20		$	0.60		$	0.30		$	0.90
Diluted - net income	$	0.19		$	0.59		$	0.30		$	0.89
Weighted average number of common shares outstanding:
Basic		44,040			45,544			44,484			45,813
Diluted		44,508			46,043			44,932			46,248

 

SMITH & WESSON BRANDS, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

			For the Year Ended April 30,
			2025			2024
			(In thousands)
Cash flows from operating activities:
Net income		$	13,425		$	41,362
Adjustments to reconcile net income to net cash (used in)/provided by
operating activities:
Depreciation and amortization			31,845			32,558
Gain on sale/disposition of assets			(2,515)			(5,595)
Recoveries on notes and accounts receivable			-			(23)
Deferred income taxes			(3,032)			856
Stock-based compensation expense			7,609			5,683
Non-cash sublease income			(1,724)			—
Other, net			(73)			—
Changes in operating assets and liabilities:
Accounts receivable			3,203			(3,896)
Inventories			(29,340)			16,618
Prepaid expenses and other current assets			(1,287)			(57)
Income taxes			1,882			(2,601)
Accounts payable			(14,771)			18,341
Accrued payroll and incentives			(8,087)			(1,418)
Accrued profit sharing			(4,462)			895
Accrued expenses and deferred revenue			(268)			3,996
Accrued warranty			(434)			142
Other assets			938			(267)
Other non-current liabilities			(132)			145
Net cash (used in)/provided by operating activities			(7,223)			106,739
Cash flows from investing activities:
Payments to acquire patents and software			(187)			(186)
Proceeds from sale of property and equipment			2,619			2,955
Proceeds from sale of intangible assets			—			6,500
Payments to acquire property and equipment			(21,605)			(90,759)
Net cash used in investing activities			(19,173)			(81,490)
Cash flows from financing activities:
Proceeds from loans and notes payable			75,000			50,000
Cash paid for debt issuance costs			(941)			—
Payments on finance lease obligation			(179)			(1,378)
Payments on notes and loans payable			(35,000)			(35,000)
Payments to acquire treasury stock			(25,468)			(10,213)
Dividend distribution			(23,096)			(22,020)
Proceeds to acquire common stock from employee stock purchase plan			1,598			1,484
Payment of employee withholding tax related to restricted stock units			(1,126)			(839)
Net cash (used in)/provided by financing activities			(9,212)			(17,966)
Net (decrease)/increase in cash and cash equivalents			(35,608)			7,283
Cash and cash equivalents, beginning of period			60,839			53,556
Cash and cash equivalents, end of period		$	25,231		$	60,839
Supplemental disclosure of cash flow information
Cash paid for:
Interest, net of amounts capitalized		$	5,193		$	4,745
Income taxes		$	7,288		$	12,662

 

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 Twelve Months Ended
		April 30, 2025						April 30, 2024						April 30, 2025						April 30, 2024
		$			% of Sales			$			% of Sales			$			% of Sales			$			% of Sales
GAAP net sales	$	140,762					$	159,148					$	474,661					$	535,833
Relocation		—						—						(4,340	)					—
Non-GAAP net sales	$	140,762					$	159,148					$	470,321					$	535,833
GAAP gross profit	$	40,545			28.8%		$	56,502			35.5%		$	127,183			26.8%		$	158,093			29.5%
Relocation expenses		516						162						3,346						2,115
Settlement		—						—						70						3,200
Non-GAAP gross profit	$	41,061			29.2%		$	56,664			35.6%		$	130,599			27.8%		$	163,408			30.5%
GAAP operating expenses	$	27,415			19.5%		$	29,495			18.5%		$	103,299			21.8%		$	110,992			20.7%
Gain on sale of asset		—						—						2,257						—
Spin related stock-based compensation		—						(3	)					—						(13	)
Relocation expenses		(26	)					155						(612	)					(4,938	)
Non-GAAP operating expenses	$	27,389			19.5%		$	29,647			18.6%		$	104,944			22.3%		$	106,041			19.8%
GAAP operating income	$	13,130			9.3%		$	27,007			17.0%		$	23,884			5.0%		$	47,101			8.8%
Gain on sale of asset		—						—						(2,257	)					—
Settlement		—						—						70						3,200
Spin related stock-based compensation		—						3						—						13
Relocation expenses		542						7						3,958						7,053
Non-GAAP operating income	$	13,672			9.7%		$	27,017			17.0%		$	25,655			5.5%		$	57,367			10.7%
GAAP net income	$	8,634			6.1%		$	27,335			17.2%		$	13,425			2.8%		$	41,362			7.7%
Gain on sale of asset		—						—						(2,257	)					—
Settlement		—						—						70						3,200
Sale of intangible assets		—						(6,500	)					—						(6,500	)
Spin related stock-based compensation		—						3						—						13
Relocation expenses		542						7						3,958						7,053
Tax effect of non-GAAP adjustments		(169	)					1,285						(551	)					(746	)
Non-GAAP net income	$	9,007			6.4%		$	22,130			13.9%		$	14,645			3.1%		$	44,382			8.3%
GAAP net income per share - diluted	$	0.19					$	0.59					$	0.30					$	0.89
Gain on sale of asset		—						—						(0.05	)					—
Settlement		—						—						—						0.07
Sale of intangible assets		—						(0.14	)					—						(0.14	)
Spin related stock-based compensation		—						—						—						—
Relocation expenses		0.01						—						0.09						0.15
Tax effect of non-GAAP adjustments		—						0.03						(0.01	)					(0.02	)
Non-GAAP net income per share - diluted	$	0.20					$	0.48					$	0.33					$	0.96	(a)
(a) Non-GAAP net income 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 Twelve Months Ended
			April 30, 2025			April 30, 2024			April 30, 2025			April 30, 2024
GAAP net income		$	8,634		$	27,335		$	13,425		$	41,362
Interest expense			1,408			1,434			7,289			4,838
Income tax expense			3,742			5,561			5,820			10,356
Depreciation and amortization			7,934			8,324			31,688			32,469
Stock-based compensation expense			1,885			1,419			7,609			5,683
Settlement			—			—			70			3,200
Gain on sale of asset			—			—			(2,257)			—
Gain on sale of intangible assets			—			(6,500)			—			(6,500)
Relocation expense			538			7			3,681			5,193
Non-GAAP Adjusted EBITDAS		$	24,141		$	37,580		$	67,325		$	96,601
Non-GAAP Adjusted EBITDAS Margin			17.2%			23.6%			14.3%			18.0%

 

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 Twelve Months Ended
			April 30, 2025			April 30, 2024			April 30, 2025			April 30, 2024
Net cash provided by/(used in) operating activities		$	40,828		$	43,616		$	(7,223)		$	106,739
Payments to acquire property and equipment			(7,291)			(5,571)			(21,605)			(90,759	)
Free cash flow		$	33,537		$	38,045		$	(28,828)		$	15,980

 

Immaterial Correction of an Error

During the fourth quarter of fiscal 2025, we identified an immaterial error related to our accrual for certain legal expenses, resulting in an overstatement of general and administrative expenses in 2024 and 2025. In accordance with Staff Accounting Bulletin ("SAB") No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, we evaluated the errors and determined that the related impact was not material to results of operations, financial position, or cash flows for any historical annual or interim period. Prior year amounts have been adjusted to reflect the immaterial correction, which (i) overstated accrued expenses and deferred revenue and general and administrative expenses by $2.3 million and (ii) understated income tax expense and overstated income tax receivable each by $548,000, in each case as of April 30, 2024 and for the year then ended.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/255931

FAQ

What were Smith & Wesson's (SWBI) Q4 2025 earnings per share?

Smith & Wesson reported Q4 2025 GAAP earnings of $0.19 per diluted share, compared to $0.59 per diluted share in the same quarter last year.

How much did Smith & Wesson's (SWBI) revenue decline in fiscal 2025?

Smith & Wesson's net sales decreased by $61.2 million or 11.4% to $474.7 million in fiscal 2025 compared to the prior fiscal year.

What is Smith & Wesson's (SWBI) dividend payment for Q4 2025?

Smith & Wesson announced a quarterly dividend of $0.13 per share, payable on July 21, 2025, to stockholders of record on July 7, 2025.

What factors affected Smith & Wesson's (SWBI) performance in Q4 2025?

The company cited macro-economic headwinds including persistent inflation, high interest rates, and tariff concerns affecting consumer discretionary spending as main factors impacting performance.

What is Smith & Wesson's (SWBI) outlook for fiscal 2026?

The company expects demand for firearms in fiscal 2026 to be similar to fiscal 2025 levels, with continued economic headwinds from inflation and tariff-related cost increases.