Smith & Wesson Brands Inc (SWBI) reported Q2 FY2025 revenue of $129.7 million, up 3.8% year over year, as demand remained supported by new product introductions despite a softer macro environment. Gross margin stood at 26.6%, modestly above the prior-year period due to a one-time accrual in the prior year, with ex-onetime effects the prior-year margin would have been around 28%. Operating income was $6.97 million (operating margin ~5.38%), and net income totaled $4.13 million, equal to an EPS of $0.093 (diluted $0.092). Cash flow from operations deteriorated to negative $7.40 million, driven by a larger working capital outflow, while capital expenditures were modest at $3.3–4.7 million for the quarter, resulting in negative free cash flow of about $2.67 million. The balance sheet remains solid with $39.1 million in cash and equivalents and $135.6 million of total debt, producing a net debt position of roughly $96.5 million; total assets reached $587.4 million and stockholders’ equity was $369.1 million. Management highlighted a strong product cycle (Bodyguard 2.0 and lever-action rifles) and continued innovation as the primary driver of market share gains, even as inflation and promotional activity pressured ASPs. For the full year, guidance contemplates a 5–10% revenue decline versus fiscal 2024 with margins roughly flat to slightly below, and capital allocation remains focused on investing in the business, maintaining a debt-free posture, and returning cash to shareholders via dividends and share repurchases. The company signaled ongoing promotional activity and channel discipline to navigate a challenging demand backdrop, with inventory levels in the distribution channel described as healthy and not stockpiling. Investors should monitor ASP dynamics, promotional intensity, inventory evolution through H2, and the execution of new product launches as pivotal catalysts to SWBI’s profitability trajectory and market share progression.