Smith & Wesson Brands (SWBI) Q4 2024 earnings summary

Executive summary

• Q4 revenue increased 10% year-over-year to $159.1 million, with full-year sales up 11.8% to $535.8 million, driven by unit growth in both handguns and long guns, outpacing the overall firearms market.

• Full-year revenue rose 12% and unit shipments grew 13%, while the overall market (NICS) declined 5.4%.

• New products accounted for over 27% of total revenue for the year and 29.1% in Q4, led by the 1854 lever-action rifle.

• Cash from operations exceeded $106 million for the year, with $60.8 million in cash on hand and $40 million in debt at year-end.

• Board approved an 8.3% increase in quarterly dividend to $0.13/share, with $22 million paid in dividends and $10.2 million in share repurchases.

Financial highlights

• Q4 net sales reached $159.1 million, up 9.9% from the prior year quarter; full-year gross margin was 29.5%, down from 32.2%.

• Q4 gross margin was 35.5%, up 6.5 percentage points year-over-year, driven by higher production, increased ASPs for long guns, and lower promotions.

• Q4 net income was $26.1 million ($0.57/share), more than double the prior year, aided by a $6.5 million sale of intangible assets.

• Q4 adjusted EPS was $0.45; full-year adjusted EPS was $0.92.

• Generated $43.6 million in operating cash in Q4 and $106.7 million for the year.

Outlook and guidance

• Fiscal 2025 revenue expected to grow mid- to high-single digits, with growth weighted to the second half.

• Q1 2025 projected to be down ~10% year-over-year, with a rebound in Q2 and stronger second half due to seasonal trends, new products, and election cycle.

• Gross margin expected to stabilize in the low 30% range for the year, with improvement in the back half as capacity and automation ramp up.

• Adjusted EBITDA anticipated to grow at a rate similar to sales; effective tax rate expected at 24%.

• Management expects healthy demand and growth in net sales and gross margin for fiscal 2025, despite a competitive and inflationary environment.