Smith & Wesson Brands Q1 Earnings Call Highlights

Smith & Wesson Brands NASDAQ: SWBI reported higher first-quarter fiscal 2027 sales and a return to profitability, citing demand across its consumer and professional firearms channels, increased product shipments and higher average selling prices. Net sales rose 32.3% year over year to $112.6 million, while net income totaled $2.6 million, or $0.06 per diluted share. That compared with a net loss of $3.4 million, or $0.08 per share, in the prior-year quarter. President and CEO Mark Smith said the company’s adjusted EBITDAS increased 86% from a year earlier. “We are off to an excellent start to fiscal 2027 with strong first quarter performance,” Smith said, pointing to innovation, industry partnerships, operational execution and the company’s brand strength. Shipments Outpaced Market Indicators Smith said overall adjusted NICS, a firearms-demand proxy based on FBI background-check data, increased 7.7% during the quarter compared with the prior-year period. Company shipments rose nearly 20%, which management said reflected market-share gains. Handgun unit shipments into the sporting-goods channel increased nearly 17%, compared with roughly 5% growth in NICS for the category. Channel inventories for the company’s handguns were flat during the period, which Smith said indicated continued retail pull-through. Long-gun unit shipments into the sporting-goods channel climbed almost 22%, outpacing a 10% increase in long-gun NICS. Channel inventories of the company’s long guns declined by about 5,000 units. Growth was led by modern sporting rifles, or MSRs, and was weighted toward May and June ahead of state-level regulatory changes, according to management. Shipments of the Model 1854 lever-action rifle doubled from the prior year, with Smith describing the result as evidence of a growing presence in the hunting segment. The company also reported strong double-digit gains among wholesale, big-box and buying-group customers, as well as high double-digit growth in law-enforcement and international shipments. Pricing, Margins and Inventory Average selling prices for handguns were unchanged sequentially from the fourth quarter and increased nearly 9% from a year earlier. Long-gun average selling prices increased nearly 11% sequentially and more than 18% year over year. Smith attributed long-gun pricing gains partly to product mix, including Model 1854 shipments, while saying limited promotional activity supported pricing across the company’s product lines. New products represented 35% of total shipments during the quarter. Gross margin was 28.7%, up 2.8 percentage points from the prior-year quarter. Chief Financial Officer Deana McPherson said $2.9 million in tariff refunds accounted for 260 basis points of the increase. Higher production absorption was lar.