Smith & Wesson Brands(US:SWBI) Newsfile·2025-12-04 21:05Core Insights - Smith & Wesson Brands, Inc. reported financial results for Q2 of fiscal 2026, showing solid profitability and operational efficiency despite a slight decline in net sales compared to the previous year [1][3][5]. Financial Performance - Q2 net sales were $124.7 million, a decrease of $5.0 million or 3.9% from the same quarter last year [5]. - Gross margin for Q2 was 24.3%, down from 26.6% in the comparable quarter last year [5]. - Adjusted EBITDAS for Q2 was $15.1 million, representing 12.1% of net sales, compared to $19.1 million or 15.0% of net sales in the same quarter last year [5][18]. - Net income for Q2 was $1.9 million, or $0.04 per diluted share, down from $4.5 million or $0.10 per diluted share in the prior year [5][12]. Operational Highlights - The company achieved operating cash flow of over $27 million in the quarter, reflecting strong operational efficiency [3]. - New products accounted for 38.7% of sales in the quarter, indicating the success of the company's innovation strategy [3]. - Distributor inventory declined by over 5% from the previous quarter and by 15% compared to October 2024, suggesting positive sell-through at retail [3]. Future Outlook - The company anticipates Q3 sales to be 8-10% higher than Q3 fiscal 2025 sales, with no significant impact from channel inventory [3]. - A quarterly dividend of $0.13 per share has been authorized, to be paid on January 2, 2026 [3]. Balance Sheet Overview - Total assets as of October 31, 2025, were $548.6 million, down from $559.6 million as of April 30, 2025 [11]. - Current liabilities decreased to $53.9 million from $66.6 million in the previous period [11]. Cash Flow Analysis - Net cash provided by operating activities was $27.3 million, an increase of $34.7 million compared to the same quarter last year [5][19]. - Free cash flow for Q2 was $16.3 million, a significant improvement from a negative free cash flow of $10.7 million in the prior year [19].