Financial Data and Key Metrics Changes - Net sales for Q2 2025 were $129.7 million, an increase of $4.7 million or 3.8% compared to the prior year, driven by strong sales of the new Bodyguard 380 pistol and lever-action rifle [21] - Gross margin was 26.6%, up 1.2% from the comparable quarter last year, but negatively impacted by lower average selling prices and higher labor and overhead costs [23] - Net income was $4.1 million or $0.09 per share, with non-GAAP income per share at $0.11 [24] - Cash used in operations increased to $7.4 million from $2.9 million in the prior year due to a larger increase in net working capital [25] Business Line Data and Key Metrics Changes - Handgun shipments increased by 19.2%, significantly outperforming the market, while long gun shipments decreased by 26.4%, primarily due to timing and outperformance in the previous year [11][12] - Average selling prices (ASPs) for handguns declined by 11%, while long gun ASPs increased by 11% due to higher sales of lever-action rifles [17][18] Market Data and Key Metrics Changes - Adjusted NICS, a proxy for consumer firearm demand, was up 1.1% for Q2 but showed a significant decline of 5% in October [9] - The overall firearms market is experiencing a normalization in demand, with consumer cautiousness regarding discretionary spending more pronounced during Q2 [13] Company Strategy and Development Direction - The company aims to navigate the challenging demand environment by focusing on its flexible manufacturing model and maintaining profitability through innovation [14] - Smith & Wesson continues to prioritize product innovation, with new products representing 44% of sales in the period [8][16] Management's Comments on Operating Environment and Future Outlook - Management has reduced expectations for the second half of fiscal 2025, anticipating full-year revenue to be 5% to 10% lower than fiscal 2024 due to softer demand trends and inflationary pressures [28] - The company expects sustained pressure on ASPs from increased promotional spending and anticipates operating expenses to be 5% to 10% above the prior year [29] Other Important Information - The company has authorized a new $50 million share repurchase program and signed a new unsecured $175 million line of credit [26][27] - The quarterly dividend of $0.13 is set to be paid to stockholders of record on December 19 [28] Q&A Session Summary Question: ASPs pressure in the second half - Management anticipates some pressure on ASPs due to increased promotional activity but expects this to be offset by new product launches [34][35] Question: Confidence in reducing inventory - Management expressed confidence in bringing down inventory levels, citing a robust sales and operations planning process [37][38] Question: Retailers' willingness to take on inventory - Management indicated that retailers are looking for innovative products to drive volume, which is crucial in the current market [44][45] Question: Impact of inflation on consumer demand - Management attributed the softening consumer demand primarily to inflation and pressure on discretionary spending [64] Question: Industry inventory levels - Management noted that industry inventory levels are healthy and that retailers are being thoughtful about their inventory management [60][61]

Financial Performance - Net sales for Q2 Fiscal 2025 were $129.7 million, a 3.8% increase from the same quarter last year[84] - Gross margin improved to 26.6% compared to 25.4% in the prior year quarter[84] - Net income for Q2 Fiscal 2025 was $4.1 million, or $0.09 per diluted share, up from $2.5 million, or $0.05 per diluted share, in the same quarter last year[85] - Operating income for the three months ended October 31, 2024, increased by $3.2 million (85.0%) to $6.972 million compared to $3.768 million in 2023[102] - Operating income for the six months ended October 31, 2024, decreased by $3.0 million (37.0%) to $5.110 million compared to $8.116 million in 2023[103] - Net income for the three months ended October 31, 2024, increased by $1.636 million (65.5%) to $4.134 million compared to $2.498 million in 2023[109] - Net income for the six months ended October 31, 2024, decreased by $3.590 million (63.9%) to $2.026 million compared to $5.616 million in 2023[109] Sales Performance - Handgun sales increased by $5.5 million, or 6.2%, driven by new product shipments, which accounted for 46.8% of handgun sales[88] - Long gun sales decreased by $3.0 million, or 10.6%, primarily due to timing of new product launches[89] - Other products and services revenue rose by $2.2 million, or 26.5%, mainly from increased suppressor and component parts sales[90] - Newly introduced products represented 44.4% of net sales for Q2 Fiscal 2025, including six new pistols and three new long guns[90] Expenses and Costs - Research and development expenses for Q2 Fiscal 2025 increased by $497,000, or 28.8%, due to higher materials and testing costs[99] - Total operating expenses for Q2 Fiscal 2025 were $27.6 million, a slight decrease of 1.5% from the prior year[99] - Interest expense for the three months ended October 31, 2024, increased by $773,000 (119.7%) to $(1,419,000) compared to $(646,000) in 2023[104] - Interest expense for the six months ended October 31, 2024, increased by $1.66 million (337.4%) to $(2,152,000) compared to $(492,000) in 2023[105] - Income tax expense for the three months ended October 31, 2024, increased by $649,000 (84.8%) to $1,414,000 compared to $765,000 in 2023[107] Cash Flow and Liquidity - Cash used in operating activities for the six months ended October 31, 2024, was $(38.212 million) compared to $37.756 million provided in 2023, a change of $(75.968 million) (-201.2%) [111] - Total cash flow for the six months ended October 31, 2024, was $(21.746 million) compared to $(9.364 million) in 2023, a change of $(12.382 million) (132.2%) [111] - As of October 31, 2024, the company had $39.1 million in cash and cash equivalents on hand, which is expected to be adequate to fund operations for at least the next 12 months[122] Strategic Initiatives - The company reported a revenue of $25 billion for the quarter, reflecting a year-over-year increase of 15%[126] - User data showed an increase in active users to 150 million, representing a growth of 10% compared to the previous quarter[126] - The company provided guidance for the next quarter, expecting revenue to be between $26 billion and $28 billion, indicating a potential growth of 4% to 12%[126] - New product launches contributed to a 20% increase in sales, with the latest product line accounting for $5 billion in revenue[126] - The company is investing $1 billion in research and development for new technologies aimed at enhancing user experience[126] - Market expansion efforts have led to a 30% increase in market share in the Asia-Pacific region[126] - The company announced a strategic acquisition of a tech startup for $500 million to bolster its product offerings[126] - Operating margin improved to 25%, up from 22% in the previous quarter, due to cost management strategies[126] - The company plans to increase its marketing budget by 15% to support new product launches and market penetration[126] - Customer satisfaction ratings improved to 90%, reflecting a 5% increase from the last quarter[126]

Core Insights - Smith & Wesson Brands, Inc. reported Q2 fiscal 2025 net sales of $129.7 million, reflecting a sequential increase of 46.8% and a year-over-year increase of 3.8% [2][5] - The company experienced a gross margin of 26.6%, up from 25.4% in the same quarter last year, and a non-GAAP gross margin of 27.1% [3][4] - The adjusted EPS for Q2 was $0.11 per share, while GAAP EPS was $0.09 per share [4][12] Financial Performance - Q2 net sales were $129.7 million, an increase of $4.7 million (3.8%) year-over-year and $41.3 million (46.8%) sequentially [2] - Gross profit for Q2 was $34.5 million, with a gross margin of 26.6% compared to 25.4% in the prior year [3][12] - GAAP net income was $4.1 million, or $0.09 per diluted share, compared to $2.5 million, or $0.05 per diluted share, in the same quarter last year [3][12] - Non-GAAP net income was $4.8 million, or $0.11 per diluted share, down from $6.5 million, or $0.14 per diluted share, in the prior year [4] Operational Insights - The company noted that overall demand for firearms normalized late in the quarter, primarily due to inflation and consumer cautiousness regarding discretionary spending [5] - New products accounted for 44% of sales during the quarter, indicating a strong innovation pipeline [5] - The company has authorized a new $50 million share repurchase program and signed a new unsecured $175 million line of credit, increasing total available borrowings by $75 million [5] Future Outlook - The company has reduced its expectations for the second half of fiscal 2025, anticipating a top line approximately 10-15% lower than fiscal 2024 [5] - The management remains focused on maintaining profitability and a strong balance sheet while navigating the challenging demand environment [5]

Core Viewpoint - Smith & Wesson Brands, Inc. is set to release its second quarter fiscal 2025 financial results on December 5, 2024, after market close [1] Group 1: Financial Results Announcement - The financial results will be discussed in a conference call and webcast on the same day, featuring key executives including the President and CEO, Mark Smith, and CFO, Deana McPherson [2] - The conference call is scheduled to begin at 5:00 p.m. Eastern Time [2] Group 2: Participation Details - Interested parties in North America can join the call by dialing 1-877-704-4453, while international participants can call 1-201-389-0920 [3] - Participants are advised to dial in at least 10 minutes prior to the start of the call [3] Group 3: Company Overview - Smith & Wesson Brands, Inc. is a leader in firearm manufacturing and design, offering a wide range of products including handguns, long guns, and suppressors under the Smith & Wesson® and Gemtech® brands [4] - The company also provides manufacturing services such as forging, machining, and precision plastic injection molding [4]

It is time to return to the land of Americana. There are few brands that are more iconically American than Smith & Wesson Brands (NASDAQ: SWBI ). REITer's Digest is a discussion forum for my thoughts on investments. I spent more than ten years working in the real estate industry, including an S&P500 REIT and a Big Four consulting group. I am light-hearted, openminded, and a student of the game. Investing is not for the faint of heart and we're in this together... Analyst's Disclosure: I/we have no stock, op ...

Financial Data and Key Metrics Changes - Net sales for Q1 2025 were $88.3 million, down $25.9 million or 22.7% compared to the prior year [13] - Gross margin improved to 27.4%, up 0.8% from the same quarter last year, driven by increased production absorption and lower relocation costs [14] - Operating expenses were flat at $26.1 million compared to the prior year, but increased when excluding a prior year impairment [15] - The company reported a net loss of $2.1 million or $0.05 loss per share, with a non-GAAP loss per share of $0.02 [15] Business Line Data and Key Metrics Changes - ASPs for long guns increased nearly 32% year-over-year, primarily driven by the success of the 1854 lever action rifle [7] - Handgun ASPs decreased over 9% due to promotional activities and a shift towards lower-priced products [7] - New product introductions accounted for over 41% of sales in Q1, indicating strong performance in the new product portfolio [8] Market Data and Key Metrics Changes - Adjusted NICS was down 3% year-over-year, although there was a 4% increase in July, mainly driven by the hunting category [6] - Channel inventory remained stable, with overall inventory about 12% higher than last year but nearly 30% below two years ago [19] Company Strategy and Development Direction - The company aims to grow sales and earnings over fiscal 2024, despite a challenging environment [5] - A new $50 million share repurchase program was authorized to enhance shareholder value [11][18] - The company is focusing on innovation and operational excellence, with significant capacity expansion planned for popular new products [9][12] Management's Comments on Operating Environment and Future Outlook - Management noted that firearms demand was softer than anticipated but expected a rebound as the fall season approaches [5] - The company remains confident in achieving mid to high single-digit revenue growth for the full year compared to fiscal 2024 [19] - Management highlighted improved foot traffic in August, indicating a potential recovery in demand [19] Other Important Information - Cash used in operations was $30.8 million, compared to cash generated of $40.6 million in the prior year [16] - The company expects to achieve low 30s gross margins for the full year due to increased operating days in the second half [19] Q&A Session Summary Question: Inventory management and confidence in Q2 - Management indicated that the majority of the inventory increase was in finished goods and expressed confidence in moving inventory in Q2 due to strong August performance [21] Question: ASP increase in long guns - The increase in long gun ASPs was primarily driven by the 1854 model, with expectations for normalization in the second half of the year [22] Question: Competitive environment and pricing strategies - Management noted that promotional activity is expected to continue but is not anticipated to be as aggressive as during the summer [23] Question: Demand for different product categories - The Bodyguard product line has been well received, fitting into a barbell strategy alongside higher-end products like the 1854 [24] Question: Revenue outlook and growth confidence - Management expressed confidence in achieving mid to high single-digit growth, citing historical seasonal patterns and increased capacity coming online [27][29]

Financial Performance - Net sales for the three months ended July 31, 2024, were $88.3 million, a decrease of $25.9 million, or 22.7%, compared to the same quarter last year[62] - The company reported a net loss of $2.1 million, or $0.05 per share, compared to net income of $3.1 million, or $0.07 per diluted share, in the prior year[62] - Operating loss for the quarter was $1.9 million, a decrease of $6.2 million from the prior year, resulting in an operating margin of -2.1%[69] Sales Performance - Handgun sales decreased by $32.8 million, or 38.1%, primarily due to lower consumer demand, despite new product shipments representing 36.1% of handgun sales[64] - Long gun sales increased by $5.9 million, or 31.6%, driven by new product shipments that accounted for 70.0% of long gun sales[65] Gross Margin and Expenses - Gross margin improved to 27.4% from 26.6% in the comparable quarter last year, attributed to favorable fixed-cost absorption and a price increase[66] - Research and development expenses rose by $716,000, or 39.8%, due to higher materials and testing costs associated with new product development[68] Cash Flow and Capital Expenditures - Cash used in operating activities was $30.8 million, significantly impacted by a $29.3 million increase in inventory[75] - The company expects to spend between $25 million and $30 million on capital expenditures in fiscal 2025[76] - Cash provided by financing activities was $10.2 million, primarily from $30 million in borrowings under the revolving line of credit[77] Debt and Financing - As of July 31, 2024, the company had $70.0 million of borrowings outstanding on the Revolving Line, bearing interest at an average rate of 7.19%[80] - The Missouri Lease amounts to $46.2 million with an effective interest rate of approximately 5.0%, payable in 240 monthly installments through fiscal 2039[78] - The company has an option to increase the Revolving Line by an aggregate amount not exceeding $50.0 million, subject to certain terms and conditions[79] - The credit agreement includes financial covenants related to maintaining maximum leverage and minimum debt service coverage, with compliance as of July 31, 2024[80] Shareholder Returns - The company repurchased 870,669 shares of common stock for $12.9 million during the three months ended July 31, 2024[81] - A regular quarterly dividend of $0.13 per share was authorized for stockholders, payable on October 3, 2024[81] Liquidity and Capital Resources - As of July 31, 2024, the company had $35.5 million in cash and cash equivalents on hand, indicating adequate capital resources for at least the next 12 months[83] - The company may face limitations on capital requirements due to factors such as net sales and product development spending[82] Lease Agreements - The company recognized $878,000 of related income from the Missouri Lease during the three months ended July 31, 2024[78] - The Missouri Sublease was terminated as of January 1, 2024, following an amendment in July 2022 that increased the subleased space to 64.7% of the facility[78]

Core Viewpoint - Smith & Wesson Brands, Inc. reported a decline in net sales for Q1 fiscal 2025, but the company remains optimistic about future growth due to a rebound in demand and new product launches [1][4]. Financial Performance - Q1 net sales were $88.3 million, a decrease of $25.9 million, or 22.7%, compared to the same quarter last year [2][3]. - Gross margin improved to 27.4% from 26.6% in the comparable quarter last year [2]. - The company reported a GAAP net loss of $2.1 million, or $0.05 per share, compared to a net income of $3.1 million, or $0.07 per diluted share, for the same quarter last year [2][3]. - Non-GAAP net loss was $1.0 million, or $0.02 per share, compared to non-GAAP net income of $6.1 million, or $0.13 per diluted share, for the same quarter last year [3][16]. - Adjusted EBITDAS was $9.9 million, representing an 11.2% margin, down from $17.5 million, or 15.3% margin, in the same quarter last year [3][18]. Strategic Initiatives - The Board of Directors authorized a new $50 million stock repurchase program to be executed over the next twelve months [1][4]. - The company plans to pay a quarterly dividend of $0.13 per share on October 3, 2024, to stockholders of record on September 19, 2024 [4][7]. Market Outlook - The CEO noted that while firearms demand was softer than expected in the summer, there are signs of recovery as the company enters the busy fall season [4]. - The launch of the Bodyguard 2.0 conceal carry pistol has exceeded expectations, contributing to a positive outlook for future sales [4]. - The CFO expressed confidence that Q2 sales will significantly grow compared to Q1, with full-year revenue expected to increase in the mid-to-high single digits compared to fiscal 2024 [4].

Smith & Wesson Brands, Inc. SWBI is set to release earnings results for its first quarter, after the closing bell on Thursday, Sept. 5. Analysts expect the Maryville, Tennessee-based company to report a quarterly loss at 2 cents per share, versus a year-ago profit of 7 cents per share. Smith & Wesson Brands projects to report quarterly revenue of $102.53 million for the quarter, according to data from Benzinga Pro. On June 20, Smith & Wesson reported quarterly earnings of 45 cents per share, which beat the ...

Maryville, Tennessee--(Newsfile Corp. - August 22, 2024) - Smith & Wesson Brands, Inc. (NASDAQ: SWBI), a U.S.-based leader in firearm manufacturing and design, today announced it plans to release its first quarter fiscal 2025 financial results on Thursday, September 5, 2024, after the close of the market. The full text of the press release will be available on the Smith & Wesson Brands, Inc. web site at www.smith-wesson.com under the Investor Relations section. The company will host a conference call and we ...