Smith & Wesson Brands, Inc. Reports Fourth Quarter and Full Fiscal 2025 Financial Results

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- Q4 Net Sales of $140.8 Million
- Q4 Gross Margin of 28.8%; Non-GAAP Gross Margin of 29.2%
- Q4 EPS of $0.19/Share
Maryville, Tennessee--(Newsfile Corp. - June 18, 2025) - Smith & Wesson Brands, Inc. (NASDAQ: SWBI), a U.S.-based leader in firearm manufacturing and design, today announced financial results for the fourth quarter and full fiscal year 2025, ended April 30, 2025.
Fourth Quarter Fiscal 2025 Financial Highlights
Net sales were $140.8 million, a decrease of $18.4 million, or 11.6%, from the comparable quarter last year.
Gross margin was 28.8% compared with 35.5% in the comparable quarter last year.
GAAP net income was $8.6 million, or $0.19 per diluted share, compared with $27.3 million, or $0.59 per diluted share, for the comparable quarter last year.
Non-GAAP net income was $9.0 million, or $0.20 per diluted share, compared with $22.1 million, or $0.48 per diluted share, for the comparable quarter last year. GAAP to non-GAAP adjustments for income exclude costs related to the relocation. For a detailed reconciliation, see the schedules that follow in this release.
Non-GAAP Adjusted EBITDAS was $24.1 million, or 17.2% of net sales, compared with $37.6 million, or 23.6% of net sales, for the comparable quarter last year.
Full Year Fiscal 2025 Financial Highlights
Net sales were $474.7 million, a decrease of $61.2 million, or 11.4%, from the prior fiscal year.
Gross margin was 26.8% compared with 29.5% in the prior fiscal year.
GAAP net income was $13.4 million, or $0.30 per diluted share, compared with $41.4 million, or $0.89 per diluted share, for the prior fiscal year.
Non-GAAP net income was $14.6 million, or $0.33 per diluted share, compared with $44.4 million, or $0.96 per diluted share, for the prior fiscal year. GAAP to non-GAAP adjustments for income include costs related to the relocation, a gain on sale of certain real estate, and other costs. For a detailed reconciliation, see the schedules that follow in this release.
Non-GAAP Adjusted EBITDAS was $67.3 million, or 14.3% of net sales, compared with $96.6 million, or 18.0% of net sales, for the prior fiscal year.
Mark Smith, President and Chief Executive Officer, commented, "Fourth quarter proved more difficult than we anticipated largely due to macro-economic and industry trends. While the combination of lower sales and production volumes, along with mix factors, pressured margins, we were able to partially offset the bottom-line impact through disciplined cost management and by leveraging our flexible manufacturing model. Looking at the overall firearms market, we continue to see consumers generally being cautious due to macro-economic factors pressuring discretionary spending. While new products and lower price point offerings are still performing well, overall conditions suggest headwinds will likely persist in the near term. Despite these challenges, we remain well positioned to succeed in this environment."
Deana McPherson, Executive Vice President and Chief Financial Officer, commented, "We believe that firearm market conditions have been negatively impacted by persistent inflation, high interest rates, and uncertainty caused by tariff concerns. That being said, the success of our new products has enabled us to maintain a leadership position in the categories of the firearm market in which we compete. We currently expect demand for firearms in fiscal 2026 to be similar to what we saw in fiscal 2025, remaining subject to economic headwinds such as inflation and the impact of tariff-related cost increases. Consistent with our capital allocation strategy, our board of directors has authorized a $0.13 per share quarterly dividend, which will be paid to stockholders of record on July 7, 2025 with payment to be made on July 21, 2025."
Conference Call and Webcast
The company will host a conference call and webcast on June 18, 2025 to discuss its fourth quarter and full fiscal 2025 financial and operational results. Speakers on the conference call will include Mark Smith, President and Chief Executive Officer, and Deana McPherson, Executive Vice President and Chief Financial Officer. The conference call may include forward-looking statements. The conference call and webcast will begin at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). Interested parties in North America are invited to participate by dialing 1-877-704-4453. Interested parties from outside North America are invited to participate by dialing 1-201-389-0920. Participants should dial in at least 10 minutes prior to the start of the call. A live and archived webcast of the event will be available on the company's website at www.smith-wesson.com under the Investor Relations section.
Reconciliation of U.S. GAAP to Non-GAAP Financial Measures
In this press release, certain non-GAAP financial measures, including "non-GAAP net income," "Adjusted EBITDAS," and "free cash flow" are presented. From time-to-time, we consider and use these supplemental measures of operating performance in order to provide the reader with an improved understanding of underlying performance trends. We believe it is useful for us and the reader to review, as applicable, both (1) GAAP measures that include (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) spin related stock-based compensation, (vi) an accrued legal settlement, (vii) a gain on sale of certain real estate, (viii) a gain on sale of intangible assets, (ix) Relocation expense, and (x) the tax effect of non-GAAP adjustments; and (2) the non-GAAP measures that exclude such information. We present these non-GAAP measures because we consider them an important supplemental measure of our performance. Our definition of these adjusted financial measures may differ from similarly named measures used by others. We believe these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. These non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for our GAAP measures. The principal limitations of these measures are that they do not reflect our actual expenses and may thus have the effect of inflating its financial measures on a GAAP basis.
About Smith & Wesson Brands, Inc.
Smith & Wesson Brands, Inc. (NASDAQ Global Select: SWBI) is a U.S.-based leader in firearm manufacturing and design, delivering a broad portfolio of quality handgun, long gun, and suppressor products to the global consumer and professional markets under the iconic Smith & Wesson® and Gemtech® brands. The company also provides forging and machining services to third parties. For more information call [phone] or visit www.smith-wesson.com.
Safe Harbor Statement
Certain statements contained in this press release may be deemed to be forward-looking statements under federal securities laws, and we intend that such forward-looking statements be subject to the safe-harbor created thereby. Such forward-looking statements include, among others, that (i) with respect to the overall firearms market, we continue to see consumers generally being cautious due to macro-economic factors pressuring discretionary spending; (ii) overall conditions suggest headwinds will likely persist in the near term; (iii) we remain well positioned to succeed in this environment; and (iv) we currently expect demand for firearms in fiscal 2026 to be similar to what we saw in fiscal 2025, remaining subject to economic headwinds such as inflation and the impact of tariff-related cost increases. We caution that these statements are qualified by important risks, uncertainties, and other factors that could cause actual results to differ materially from those reflected by such forward-looking statements. Such factors include, among others, economic, social, political, legislative, and regulatory factors; the impact of tariffs; the potential for increased regulation of firearms and firearm-related products; actions of social activists that could have an adverse effect on our business; the impact of lawsuits; the demand for our products; the state of the U.S. economy in general and the firearm industry in particular; general economic conditions and consumer spending patterns; our competitive environment; the supply, availability and costs of raw materials and components; our anticipated growth and growth opportunities; our strategies; our ability to maintain and enhance brand recognition and reputation; our ability to effectively manage and execute the Relocation; our ability to introduce new products; the success of new products; the potential for cancellation of orders from our backlog; and other risks detailed from time to time in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended April 30, 2025.
Contact:[e-mail][phone]
SMITH & WESSON BRANDS, INC AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Unaudited)
As of:
April 30, 2025
April 30, 2024
(In thousands, except par value and share data)
ASSETS
Current assets: Cash and cash equivalents
$
25,231$
60,839
Accounts receivable, net of allowances for credit losses of $5 on April 30, 2025 and $0 on April 30, 2024
55,868
59,071
Inventories189,840
160,500
Prepaid expenses and other current assets6,260
4,973
Income tax receivable66
1,948
Total current assets277,265
287,331
Property, plant, and equipment, net of accumulated depreciation and amortization of $368,811 on April 30, 2025 and $352,615 on April 30, 2024
242,648
252,633
Intangibles, net2,409
2,598
Goodwill19,024
19,024
Deferred income taxes10,260
7,228
Other assets8,006
8,614
Total assets
$
559,612$
577,428
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Accounts payable
$
26,887$
41,831
Accrued expenses and deferred revenue24,678
24,489
Accrued payroll and incentives9,060
17,147
Accrued profit sharing4,636
9,098
Accrued warranty1,379
1,813
Total current liabilities66,640
94,378
Notes and loans payable79,096
39,880
Finance lease payable, net of current portion33,703
35,404
Other non-current liabilities7,719
7,852
Total liabilities187,158
177,514
Commitments and contingencies Stockholders' equity: Preferred stock, $0.001 par value, 20,000,000 shares authorized, no shares issued or outstanding
—
—
Common stock, $0.001 par value, 100,000,000 shares authorized, 75,789,455 issued and 44,111,461 shares outstanding on April 30, 2025 and 75,395,490 shares issued and 45,561,569 shares outstanding on April 30, 2024
76
75
Additional paid-in capital298,075
289,994
Retained earnings532,615
542,414
Accumulated other comprehensive income—
73
Treasury stock, at cost (31,677,994 shares on April 30, 2025 and 29,833,921 shares on April 30, 2024)
(458,312)
(432,642)
Total stockholders' equity372,454
399,914
Total liabilities and stockholders' equity
$
559,612$
577,428
SMITH & WESSON BRANDS, INC AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(Unaudited)
For the Three Months Ended April 30,
For the Year Ended April 30,
2025
2024
2025
2024
(In thousands, except per share data)
Net sales
$
140,762$
159,148$
474,661$
535,833
Cost of sales
100,217
102,646
347,478
377,740
Gross profit
40,545
56,502
127,183
158,093
Operating expenses:
Research and development
1,962
1,774
9,567
7,258
Selling, marketing, and distribution
11,473
9,473
41,314
40,611
General and administrative
13,974
18,258
54,933
63,134
Gain on sale/disposition of assets, net
6
(10)
(2,515)
(11)
Total operating expenses
27,415
29,495
103,299
110,992
Operating income
13,130
27,007
23,884
47,101
Other (expense)/income, net:
Other (expense)/income, net
(6)
6,496
(17)
6,672
Interest expense, net
(748)
(607)
(4,622)
(2,055)
Total other (expense)/income, net
(754)
5,889
(4,639)
4,617
Income before income taxes
12,376
32,896
19,245
51,718
Income tax expense
3,742
5,561
5,820
10,356
Net income
$
8,634$
27,335$
13,425$
41,362
Net income per share:
Basic - net income
$
0.20$
0.60$
0.30$
0.90
Diluted - net income
$
0.19$
0.59$
0.30$
0.89
Weighted average number of common shares outstanding:
Basic
44,040
45,544
44,484
45,813
Diluted
44,508
46,043
44,932
46,248
SMITH & WESSON BRANDS, INC AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)
For the Year Ended April 30,
2025
2024
(In thousands)
Cash flows from operating activities:
Net income$
13,425$
41,362
Adjustments to reconcile net income to net cash (used in)/provided by
operating activities:
Depreciation and amortization
31,845
32,558
Gain on sale/disposition of assets
(2,515)
(5,595)
Recoveries on notes and accounts receivable
-
(23)
Deferred income taxes
(3,032)
856
Stock-based compensation expense
7,609
5,683
Non-cash sublease income
(1,724)
—
Other, net
(73)
—
Changes in operating assets and liabilities:
Accounts receivable
3,203
(3,896)
Inventories
(29,340)
16,618
Prepaid expenses and other current assets
(1,287)
(57)
Income taxes
1,882
(2,601)
Accounts payable
(14,771)
18,341
Accrued payroll and incentives
(8,087)
(1,418)
Accrued profit sharing
(4,462)
895
Accrued expenses and deferred revenue
(268)
3,996
Accrued warranty
(434)
142
Other assets
938
(267)
Other non-current liabilities
(132)
145
Net cash (used in)/provided by operating activities
(7,223)
106,739
Cash flows from investing activities:
Payments to acquire patents and software
(187)
(186)
Proceeds from sale of property and equipment
2,619
2,955
Proceeds from sale of intangible assets
—
6,500
Payments to acquire property and equipment
(21,605)
(90,759)
Net cash used in investing activities
(19,173)
(81,490)
Cash flows from financing activities:
Proceeds from loans and notes payable
75,000
50,000
Cash paid for debt issuance costs
(941)
—
Payments on finance lease obligation
(179)
(1,378)
Payments on notes and loans payable
(35,000)
(35,000)
Payments to acquire treasury stock
(25,468)
(10,213)
Dividend distribution
(23,096)
(22,020)
Proceeds to acquire common stock from employee stock purchase plan
1,598
1,484
Payment of employee withholding tax related to restricted stock units
(1,126)
(839)
Net cash (used in)/provided by financing activities
(9,212)
(17,966)
Net (decrease)/increase in cash and cash equivalents
(35,608)
7,283
Cash and cash equivalents, beginning of period
60,839
53,556
Cash and cash equivalents, end of period$
25,231$
60,839
Supplemental disclosure of cash flow information
Cash paid for:
Interest, net of amounts capitalized$
5,193$
4,745
Income taxes$
7,288$
12,662
SMITH & WESSON BRANDS, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES (Dollars in thousands, except per share data)(Unaudited)
For the Three Months Ended
For the Twelve Months Ended
April 30, 2025
April 30, 2024
April 30, 2025
April 30, 2024
$
% of Sales
$
% of Sales
$
% of Sales
$
% of Sales
GAAP net sales
$
140,762
$
159,148
$
474,661
$
535,833
Relocation—
—
(4,340
)
—
Non-GAAP net sales
$
140,762
$
159,148
$
470,321
$
535,833
GAAP gross profit
$
40,545
28.8%$
56,502
35.5%$
127,183
26.8%$
158,093
29.5%
Relocation expenses516
162
3,346
2,115
Settlement—
—
70
3,200
Non-GAAP gross profit
$
41,061
29.2%$
56,664
35.6%$
130,599
27.8%$
163,408
30.5%
GAAP operating expenses
$
27,415
19.5%$
29,495
18.5%$
103,299
21.8%$
110,992
20.7%
Gain on sale of asset—
—
2,257
—
Spin related stock-based compensation—
(3
)
—
(13
)
Relocation expenses(26
)
155
(612
)
(4,938
)
Non-GAAP operating expenses
$
27,389
19.5%$
29,647
18.6%$
104,944
22.3%$
106,041
19.8%
GAAP operating income
$
13,130
9.3%$
27,007
17.0%$
23,884
5.0%$
47,101
8.8%
Gain on sale of asset—
—
(2,257
)
—
Settlement—
—
70
3,200
Spin related stock-based compensation—
3
—
13
Relocation expenses542
7
3,958
7,053
Non-GAAP operating income
$
13,672
9.7%$
27,017
17.0%$
25,655
5.5%$
57,367
10.7%
GAAP net income
$
8,634
6.1%$
27,335
17.2%$
13,425
2.8%$
41,362
7.7%
Gain on sale of asset—
—
(2,257
)
—
Settlement—
—
70
3,200
Sale of intangible assets—
(6,500
)
—
(6,500
)
Spin related stock-based compensation—
3
—
13
Relocation expenses542
7
3,958
7,053
Tax effect of non-GAAP adjustments(169
)
1,285
(551
)
(746
)
Non-GAAP net income
$
9,007
6.4%$
22,130
13.9%$
14,645
3.1%$
44,382
8.3%
GAAP net income per share - diluted
$
0.19
$
0.59
$
0.30
$
0.89
Gain on sale of asset—
—
(0.05
)
—
Settlement—
—
—
0.07
Sale of intangible assets—
(0.14
)
—
(0.14
)
Spin related stock-based compensation—
—
—
—
Relocation expenses0.01
—
0.09
0.15
Tax effect of non-GAAP adjustments—
0.03
(0.01
)
(0.02
)
Non-GAAP net income per share - diluted
$
0.20
$
0.48
$
0.33
$
0.96
(a)
(a) Non-GAAP net income per share does not foot due to rounding.
SMITH & WESSON BRANDS, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EBITDAS (In thousands)(Unaudited)For the Three Months Ended
For the Twelve Months Ended
April 30, 2025
April 30, 2024
April 30, 2025
April 30, 2024
GAAP net income$
8,634$
27,335$
13,425$
41,362
Interest expense
1,408
1,434
7,289
4,838
Income tax expense
3,742
5,561
5,820
10,356
Depreciation and amortization
7,934
8,324
31,688
32,469
Stock-based compensation expense
1,885
1,419
7,609
5,683
Settlement
—
—
70
3,200
Gain on sale of asset
—
—
(2,257)
—
Gain on sale of intangible assets
—
(6,500)
—
(6,500)
Relocation expense
538
7
3,681
5,193
Non-GAAP Adjusted EBITDAS$
24,141$
37,580$
67,325$
96,601
Non-GAAP Adjusted EBITDAS Margin
17.2%
23.6%
14.3%
18.0%
SMITH & WESSON BRANDS, INC. AND SUBSIDIARIESRECONCILIATION OF NET CASH (USED IN) / PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (In thousands)(Unaudited)For the Three Months Ended
For the Twelve Months Ended
April 30, 2025
April 30, 2024
April 30, 2025
April 30, 2024Net cash provided by/(used in) operating activities$
40,828$
43,616$
(7,223)$
106,739Payments to acquire property and equipment
(7,291)
(5,571)
(21,605)
(90,759
)
Free cash flow$
33,537$
38,045$
(28,828)$
15,980
Immaterial Correction of an Error
During the fourth quarter of fiscal 2025, we identified an immaterial error related to our accrual for certain legal expenses, resulting in an overstatement of general and administrative expenses in 2024 and 2025. In accordance with Staff Accounting Bulletin ("SAB") No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, we evaluated the errors and determined that the related impact was not material to results of operations, financial position, or cash flows for any historical annual or interim period. Prior year amounts have been adjusted to reflect the immaterial correction, which (i) overstated accrued expenses and deferred revenue and general and administrative expenses by $2.3 million and (ii) understated income tax expense and overstated income tax receivable each by $548,000, in each case as of April 30, 2024 and for the year then ended.
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