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Jan 31, 2023

Smith & Wesson Q3 2023 Earnings Report

Reported a decrease in net sales compared to the previous year, but an increase compared to pre-pandemic levels, with gross margin and EPS exceeding pre-pandemic levels.

Key Takeaways

Smith & Wesson Brands, Inc. reported Q3 fiscal year 2023 financial results, with net sales of $129.0 million and EPS of $0.24 per share. The company's top-line increased sequentially and exceeded the comparable pre-pandemic quarter in fiscal 2020. Gross margin was 32.4%, and non-GAAP Adjusted EBITDAS was $23.7 million, or 18.4% of net sales.

Net sales were $129.0 million, a decrease of 27.4% from the comparable quarter last year, but 1.3% higher than the comparable quarter in fiscal 2020.

Gross margin was 32.4% compared with 39.6% in the comparable quarter last year and 28.0% in the comparable quarter in fiscal 2020.

GAAP net income was $11.1 million, or $0.24 per diluted share, compared with $30.5 million, or $0.65 per diluted share, for the comparable quarter last year.

Non-GAAP Adjusted EBITDAS was $23.7 million, or 18.4% of net sales, compared with $51.9 million, or 29.2% of net sales, for the comparable quarter last year.

Total Revenue
$129M
Previous year: $178M
-27.4%
EPS
$0.25
Previous year: $0.69
-63.8%
Gross Margin
32.4%
Previous year: 39.6%
-18.2%
Adjusted EBITDAS
$23.7M
Previous year: $51.9M
-54.3%
Gross Profit
$41.8M
Previous year: $70.4M
-40.6%
Cash and Equivalents
$44.6M
Previous year: $107M
-58.4%
Free Cash Flow
-$18.3M
Previous year: $1.93M
-1043.6%
Total Assets
$529M
Previous year: $469M
+12.8%

Smith & Wesson

Smith & Wesson

Forward Guidance

The company anticipates continued focus on long-term profitability, market share performance, and capital returns to stockholders.

Positive Outlook

  • The firearm market remains healthy.
  • Strong participation growth in recent years.
  • Large and loyal base of core consumers.
  • Compelling view of the future for a leading brand.
  • Focus on managing the business for long-term profitability.

Challenges Ahead

  • Economic factors.
  • Social factors.
  • Political factors.
  • Legislative factors.
  • Regulatory factors.