Smith & Wesson stock gains 6% as earnings, revenue beat expectations in Q4

MARYVILLE, Tennessee – Smith & Wesson Brands, Inc. (NASDAQ:SWBI), a prominent American firearms manufacturer, has reported a notable increase in its fourth-quarter earnings and revenue, surpassing analyst expectations.

The company announced a fourth-quarter adjusted EPS of $0.45, which is $0.09 higher than the analyst estimate of $0.36. Revenue for the quarter reached $159.1 million, exceeding the consensus estimate of $156.8 million and representing a 9.9% increase from the same quarter last year.

The company’s stock price surged by 6.7% following the announcement.

Smith & Wesson reported a gross margin of 35.5% for the quarter, a significant improvement from the 29.0% margin in the comparable quarter of the previous year. The adjusted EBITDAS margin also saw an increase to 22.6%, up from 20.9% year-over-year (YoY).

Mark Smith, President and Chief Executive Officer, expressed pride in the company’s discipline and execution against strategic initiatives, which he believes have consistently reinforced Smith & Wesson’s position as a market leader and delivered solid returns for shareholders. He remains optimistic about the company’s prospects, expecting healthy demand for firearms in fiscal 2025.

Deana McPherson, Executive Vice President and Chief Financial Officer, highlighted the nearly 10% increase in fourth-quarter net sales compared to the same quarter last year. McPherson also noted the company’s success in generating operating cash of $43.6 million during the quarter and $106.7 million for the full year.

Looking ahead, despite a competitive marketplace and inflationary pressures, Smith & Wesson anticipates growth in both net sales and gross margin for fiscal 2025. The company’s confidence is bolstered by a robust pipeline of new products, a leading brand, a new state-of-the-art facility, a strong balance sheet, and dedicated employees.

The company’s board has approved an 8.3% increase in the quarterly dividend, reflecting its commitment to shareholder returns. The dividend of $0.13 per share is scheduled to be paid to stockholders of record on July 11, 2024, with payment to be made on July 25, 2024.

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