Smith & Wesson Brands, Inc.

First-quarter net sales were $112.6 million, up 32.3% year over year. Gross margin was 28.7%, up 2.8 percentage points from the prior year, with $2.9 million of tariff refunds contributing 260 basis points of the improvement. Net income was $2.6 million, or $0.06 per diluted share, versus a $3.4 million net loss, or $0.08 per share, last year. Adjusted EBITDA was up 86% year over year, though no dollar figure was stated in the transcript. For Q2, management expects sales to be roughly 10% above last year, gross margin to be 200 to 300 basis points higher than last year’s Q2, operating expenses to be 10% to 15% higher than Q1, and an effective tax rate of about 30%. For the full year, fiscal 2027 revenue is still expected to grow approximately 5% to 7% over FY2026.

Mark Smith framed the quarter as an excellent start to fiscal 2027, driven by innovation, industry partnerships, operational execution, and brand strength. He emphasized that shipments outpaced the broader market, channel inventories stayed flat, and the company gained share in both handguns and long guns. His tone was confident but measured: he said this year should be “a little steadier” than last year, with sustained market share gains building into the second half.

Deana McPherson focused on the financial drivers behind the improved quarter: $112.6 million of net sales, 28.7% gross margin, and $2.6 million of net income, all aided by stronger shipments and lower interest expense from reduced net debt. She noted that tariff refunds added 260 basis points to gross margin, while operating expenses rose to $28.1 million due to legal, compensation, selling, freight, and advertising costs. On cash and capital allocation, she said the company used $8.8 million in operations, spent $11.9 million on capex, ended with $25.2 million in cash and investments and $40 million in borrowings, paid $6 million in dividends, and expects full-year capex of $45 million to $50 million.

Analysts pressed on why Q1 revenue beat the June outlook while full-year guidance stayed at 5% to 7%, and whether demand had been pulled forward from Q2 or the back half. Mark Smith said the year is shaping up to be “a little steadier” than last year, with less of the big Q4 distortion seen in FY2026 from state regulatory changes, and he said the company remains comfortable with the 5% to 7% full-year growth target. On ASPs, management said pricing strength was driven by mix, especially the 1854 lever-action rifle, and by limited promotions, and they expect those ASP levels to continue. On professional/law-enforcement sales, Mark Smith said the training academy investments are beginning to pay off and that there is a “nice pipeline” into the back half of the year.