SWBI · Smith & Wesson Brands, Inc.

Smith & Wesson's fourth quarter results underscore the strength of its iconic brand and disciplined execution. Net sales surged 26.7% to $178.4 million, driven primarily by handgun shipments, which represented over 80% of units shipped. Handgun unit sales into the sporting goods channel increased 23.2% year over year, far outpacing the 1.1% rise in NICS, indicating strong consumer preference and market share gains. New products contributed 37.5% of total revenue, highlighting successful innovation. Gross margin expanded to 29.8% from 28.8%, benefiting from favorable product mix and operational leverage. GAAP net income nearly doubled to $16.2 million ($0.36 per share) versus $8.6 million ($0.19) in the prior year quarter, while non-GAAP net income was approximately equal. Adjusted EBITDAS margin improved to 17.3% from 16.7%. For the full fiscal year 2026, net sales grew 10.4% to $523.8 million, gross margin was stable at 26.9%, and GAAP net income rose to $18.5 million ($0.41 per diluted share) from $13.4 million ($0.30). Cash generation was exceptional: free cash flow swung from negative $28.8 million in FY2025 to positive $90.4 million, allowing the company to repay $60 million of its revolving credit facility and reduce total debt to $19.1 million. Management expects firearm industry demand in fiscal 2027 to remain healthy and slightly higher than fiscal 2026. The board declared a quarterly dividend of $0.13 per share, reflecting confidence in the company's financial position and commitment to shareholder returns.