Smith & Wesson Brands (SWBI) Q1 2027 earnings summary

Executive summary

• Net sales reached $112.6 million, up 32.3% year-over-year, driven by robust demand in both consumer and professional channels and successful product innovation initiatives.

• Gross margin improved to 28.7% from 25.9% year-over-year, aided by a $2.9 million non-recurring tariff refund.

• Net income was $2.6 million ($0.06 per diluted share), reversing a net loss of $3.4 million ($0.08 per share) in the prior year.

• Outperformed the market in both handguns and long guns, gaining share and maintaining positive momentum into fiscal 2027.

• Non-GAAP Adjusted EBITDAS rose to $13.8 million (12.2% of net sales), up from $7.4 million (8.7% of net sales) year-over-year.

Financial highlights

• Handgun sales rose $18.8 million (29.0%) and long gun sales increased $6.8 million (49.9%) year-over-year; other products and services revenue grew $1.9 million (29.0%).

• Adjusted EBITDAS grew 86% year-over-year; EPS improved to $0.06 from a loss of $0.08 last year.

• Operating income was $4.2 million (3.7% margin), up from a loss of $3.0 million (-3.5% margin) last year.

• Free cash flow was negative $20.8 million, compared to negative $12.4 million year-over-year.

• Cash and cash equivalents stood at $18.7 million as of July 31, 2026, up from $6.5 million at the prior fiscal year-end.

Outlook and guidance

• Q2 sales expected to be roughly 10% above last year, with full-year revenue growth projected at 5%-7% over FY 2026.

• Q2 gross margins anticipated to be 200-300 basis points higher year-over-year; operating expenses expected to rise 10%-15% sequentially due to volume and investment in R&D.

• Inventory levels are expected to build through Q2 FY2027 and then decline for the remainder of the fiscal year.

• Capital expenditures for FY2027 are projected at $45–50 million, focused on capacity expansion and efficiency.

• Management anticipates a normal seasonal environment and continued strong demand.