In This Article:
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Net Sales: $115.9 million, down 15.7% from the prior year comparable quarter.
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Gross Margin: 24.1%, 4.6% below the comparable quarter last year.
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Operating Expenses: $23.8 million, $4.3 million lower than the prior year comparable quarter.
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Net Income: $1.7 million or $0.04 per share.
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Non-GAAP Income Per Share: $0.02.
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Cash Used in Operations: $9.8 million.
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Capital Expenditures: $6.3 million for the third quarter.
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Share Repurchase: Approximately 220,000 shares at an average price of $12.94, totaling $2.8 million.
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Dividends Paid: $5.7 million.
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Cash and Borrowings: $26.7 million in cash and $110 million in borrowings on the line of credit.
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Quarterly Dividend: $0.13 per share, payable on April 3.
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Average Selling Prices (ASPs): Overall ASPs declined 3.1% year-over-year.
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Handgun ASPs: Declined 7.8%.
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Long Gun ASPs: Increased 17.2%.
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Adjusted NICS: Down 4.5% for the third quarter.
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Shipments: Declined 7.7% in the period.
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Inventory Levels: Slightly elevated due to lower than anticipated Q3 sales.
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Share Count Reduction: More than 1.5 million shares net of dilution in the first nine months of fiscal 2025.
Release Date: March 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Smith & Wesson Brands Inc (NASDAQ:SWBI) achieved strong performance in new product sales, with products introduced within the past year accounting for over 41% of sales in the quarter.
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The company maintained solid profitability by leveraging a flexible manufacturing model, despite top-line revenue coming in slightly below target.
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Smith & Wesson Brands Inc (NASDAQ:SWBI) gained market share in the handgun category, with shipments declining less than the overall market.
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The introduction of the Bodyguard 2.0 has been successful, driving strong demand and contributing to market share gains.
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The company has a robust pipeline of new products expected to be introduced in the final quarter of FY25 and throughout the next year, positioning it well for future growth.
Negative Points
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Overall net sales for the third quarter were down 15.7% compared to the prior year, reflecting softer consumer demand and persistent inflation.
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Average selling prices (ASPs) for handguns declined by 7.8%, driven by lower-priced products and promotions.
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Long gun shipments declined by 26.7% due to outperformance in the prior-year period and a narrow product offering in the seasonal hunting category.
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Gross margin decreased by 4.6% compared to the prior year, impacted by unfavorable fixed cost absorption and higher promotional costs.
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The company anticipates full-year revenue to decline by 5% to 10% from fiscal 2024, with expectations closer to a 10% decline due to softer demand trends.