"Overall firearms demand during our first fiscal quarter was softer than we anticipated, but our results once again proved the resiliency of our flexible manufacturing model, which allows us to adapt quickly to any market conditions and still deliver on bottom-line profitability targets."
— Mark Smith
03Detailed Report
SWBI
Company SWBI
Period
Q1 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 20, 2026
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Executive Summary
Smith & Wesson Brands, Inc. (SWBI) reported its QQ1 2025 results amid softer overall firearms demand, with net sales of $88.3 million, down 22.7% year over year. The quarter featured a restrictive demand environment and increased promotional activity, contributing to a net loss of $2.11 million and negative EPS of $0.0465. Management highlighted the resiliency of the company’s flexible manufacturing model, which helped deliver EBITDAS near $10 million and supported profitability targets despite weaker top-line performance. Gross margin expanded versus the prior year, aided by higher fixed-cost absorption and lower relocation costs, though management notes that first-quarter margins typically run lower due to operating-day dynamics. Looking ahead, management reiterated a constructive full-year view: revenue is expected to grow mid- to high-single digits versus fiscal 2024, Q2 sales projected to be 5%–10% above Q2 2024, and gross margins anticipated to land in the low- to mid-30s for the year as operating-days normalize in the second half. The company also signaled ongoing product innovation (Bodyguard 2.0; 1854 lever action) and capacity expansions to support a stronger second half, along with an active capital-return program (new $50 million buyback authorization) and a path to a debt-free balance sheet by year-end. While near-term results reflect seasonality and promotional intensity, the combination of product momentum, capacity deployment, and disciplined capital allocation supports an improving trajectory into the fall and holiday season.
Key Performance Indicators
Revenue
Decreasing
88.33M
QoQ: -44.50% | YoY: -22.68%
Gross Profit
Decreasing
27.03M
30.60% margin
QoQ: -52.29% | YoY: -11.08%
Operating Income
Decreasing
-1.86M
QoQ: -107.36% | YoY: -142.81%
Net Income
Decreasing
-2.11M
QoQ: -108.07% | YoY: -167.54%
EPS
Decreasing
-0.05
QoQ: -108.16% | YoY: -168.79%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue and profitability overview:
- Revenue: $88.334 million in QQ1 2025, down 22.7% YoY and 44.5% QoQ from the prior-year quarter. YoY revenue decline reflects softer demand and promotional intensity across the firearms market.
- Gross profit: $27.033 million, with a gross margin of 30.6% (grossProfitRatio). YoY gross profit fell 11.1%, while QoQ gross profit declined 52.3% as seasonal factors affected first-quarter volume. Management notes gross margin improvement versus a year ago (80 bps YoY) driven by higher absorption and lower relocation costs; note that some disclosures in the press release describe margins in the low-30s for the full year.
- Operating income: -$2.062 million, a YoY decline of 142.8% and QoQ decline of 107.4%, reflecting the revenue shortfall and ongoing investment in product development and promotions.
- Net income / EPS: Net income of -$2.106 million and diluted EPS of -$0.0465. YoY net income and EPS deteriorated by approximately 167.5% and 168.8% respectively, with QoQ declines of about 108% in both metrics.
- EBITDA / margin: EBITDA of $6.634 million (EBITDA margin ~7.5%).
- Cash flow and liquidity: Net cash provided by operating activities was -$30.815 million; free cash flow was -$35.538 million; cash at end of period $35.515 million; total debt $107.671 million and net debt $72.156 million. The company ended the quarter with borrowings on its line of credit of $70 million.
- Balance sheet strength: Total assets $571.268 million; total liabilities $193.282 million; total stockholders’ equity $377.986 million; inventory $189.814 million; current ratio 3.54; quick ratio 1.187.
- Leverage and capitalization: Long-term debt $105.387 million; short-term debt $2.284 million; debt-to-equity 0.285; debt-to-capitalization 0.222; interest coverage negative (as reported).
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
88.33M
-22.68%
-44.50%
Gross Profit
27.03M
-11.08%
-52.29%
Operating Income
-1.86M
-142.81%
-107.36%
Net Income
-2.11M
-167.54%
-108.07%
EPS
-0.05
-168.79%
-108.16%
Key Financial Ratios
Gross Profit Margin
Fair
30.60%
Gross profit margin is moderate, room for improvement in cost management
Operating Profit Margin
Weak
-0.02%
Operating margin is below industry norms, profitability concerns
Net Profit Margin
Weak
-0.02%
Net profit margin is below industry norms, profitability concerns
Return on Assets
Weak
0.00%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
-0.01%
Return on equity suggests inefficient capital allocation
Current Ratio
Strong
3.54
Current ratio indicates excellent liquidity and financial flexibility
Debt to Equity
Conservative
0.29
Debt-to-equity shows conservative leverage and low financial risk
P/E Ratio
Negative
-89.04x
Negative earnings make P/E ratio not meaningful
Price to Book
Fair Value
1.98x
Price-to-book ratio reasonable for profitable companies
Management Insights Available for Members
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