Executive Summary
Smith & Wesson Brands Inc reported QQ3 2025 revenue of $115.9 million with a gross profit of $27.9 million and a net income of $1.66 million. The gross margin stood at 24.1%, while operating and net margins were modest at 3.6% and 1.4%, respectively. Year-over-year (YoY) and quarter-over-quarter (QoQ) comparisons reveal pronounced deterioration in profitability metrics versus the prior year, driven by higher operating expenses and non-cash/working capital dynamics, despite a solid liquidity profile. Free cash flow remained negative at $(16.2) million, and net debt stood at approximately $118.4 million, underscoring balance-sheet discipline pressures as the company exercises inventory management and cost controls in a challenging demand environment.
Management commentary is not available in the provided dataset (no earnings-call transcript included). As a result, the assessment relies on reported financials, ratio analysis, and peer context to gauge strategic posture, operating leverage, and near-term risk. The absence of explicit forward guidance suggests a cautious stance on near-term visibility, consistent with an industry backdrop of regulatory sensitivity and cyclicality. Investors should monitor working capital dynamics, inventory normalization, and any changes in defense or consumer demand that could influence top-line trajectory and margin resilience.
Key Performance Indicators
QoQ: -10.64% | YoY:-15.71%
QoQ: -19.10% | YoY:-30.25%
QoQ: -40.83% | YoY:-65.91%
QoQ: -59.77% | YoY:-78.90%
QoQ: -59.31% | YoY:-77.76%
Key Insights
Revenue: $115.885m (QQ3 2025). QoQ: -10.64% vs Q2 2025. YoY: -15.71%.
Gross Profit: $27.947m. Gross Margin: 24.12%. QoQ: -19.10%. YoY: -30.25%.
Operating Income: $4.125m. Operating Margin: 3.56%. QoQ: -40.83%. YoY: -65.91%.
Net Income: $1.663m. Net Margin: 1.43%. QoQ: -59.77%. YoY: -78.90%.
EPS (USD): $0.0375 (diluted $0.0375). QoQ: -59.31%. YoY: -77.76%.
EBITDA: $11.724m. EBITDA Margin: 10.12%.
Cash Flow: Operating cash flow $(9.839)m; free cash flow $(16.187)m.
Capital Expenditures: $(6.348)m....
Financial Highlights
Revenue: $115.885m (QQ3 2025). QoQ: -10.64% vs Q2 2025. YoY: -15.71%.
Gross Profit: $27.947m. Gross Margin: 24.12%. QoQ: -19.10%. YoY: -30.25%.
Operating Income: $4.125m. Operating Margin: 3.56%. QoQ: -40.83%. YoY: -65.91%.
Net Income: $1.663m. Net Margin: 1.43%. QoQ: -59.77%. YoY: -78.90%.
EPS (USD): $0.0375 (diluted $0.0375). QoQ: -59.31%. YoY: -77.76%.
EBITDA: $11.724m. EBITDA Margin: 10.12%.
Cash Flow: Operating cash flow $(9.839)m; free cash flow $(16.187)m.
Capital Expenditures: $(6.348)m. Depreciation & Amortization: $7.599m.
Net Debt: $118.395m (Total debt $145.099m; cash $26.704m).
Liquidity: Current ratio 4.67; Quick ratio 1.559; Cash ratio 0.417. Days Sales Outstanding (DSO) ~50.5; Days Inventory Outstanding (DIO) ~204.5; Cash Conversion Cycle ~229 days.
Balance Sheet: Total assets $578.857m; Total liabilities $214.786m; Total stockholders' equity $364.071m. Equity multiplier ~1.59; Debt to capital ~28.5%; Debt to equity ~0.399.
Valuation (illustrative peers): P/E ~70.17; P/B ~1.28; P/S ~4.03; Dividend yield ~1.23%; Enterprise Value to EBITDA ~49.9.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
115.89M |
-15.71% |
-10.64% |
| Gross Profit |
27.95M |
-30.25% |
-19.10% |
| Operating Income |
4.13M |
-65.91% |
-40.83% |
| Net Income |
1.66M |
-78.90% |
-59.77% |
| EPS |
0.04 |
-77.76% |
-59.31% |
Key Financial Ratios
operatingProfitMargin
1.89%
operatingCashFlowPerShare
$-0.22
freeCashFlowPerShare
$-0.37
Management Commentary
No earnings-call transcript data provided in the dataset. Consequently, transcript-specific themes and management quotes could not be synthesized. Expected themes in a typical call would include strategy (product mix, defense opportunities), operational execution (inventory management, cost control, new component manufacturing capabilities), and market conditions (regulatory climate, demand for firearms and accessories).
Forward Guidance
No explicit forward guidance was disclosed in the provided data. In the absence of formal targets, the near-term outlook hinges on: (1) stabilization or improvement in top-line trends, (2) margin leverage through cost containment and product mix optimization, and (3) working-capital discipline to reduce cash burn and support a more favorable free cash flow profile. Investors should monitor: orders/backlog signals (if disclosed), inventory levels and turnover (given DIO of ~204 days), any updates on defense-related programs or export initiatives, regulatory developments affecting firearm sales, and ongoing efforts to optimize manufacturing and component services.