Summary of the quarter:
- SWBI delivered Q3 2025 net sales of $115.9 million, down 15.7% year over year and down 10.6% quarter over quarter, reflecting softer consumer demand for core products despite robust performance from new product introductions. Gross margin stood at 24.1%, a 4.6 percentage point decline versus the prior-year period, driven by unfavorable fixed-cost absorption from lower volumes and higher promotional activity. Operating income was $4.1 million with a 3.56% operating margin, and net income was $1.66 million ($0.04 per share GAAP; $0.02 non-GAAP).
- Management highlighted strong product momentum, with new launches contributing over 41% of quarterly sales, and emphasized a disciplined, flexible manufacturing model designed to preserve profitability across demand cycles. Distributors reported lean channel inventories (under nine weeks), supporting the view that the market remains steady rather than over-supplied.
- The company reaffirmed a cautious, balanced approach to capital allocation: regular dividend of $0.13 per share, ongoing stock repurchases (approximately 220k shares in Q3), and targeted investment in R&D and manufacturing. Full-year revenue guidance was revised toward a ~10% decline versus fiscal 2024, with Q4 margins expected to be weaker as production slows to reduce inventory. The balance sheet remains solid, with cash of $26.7 million and a long-term debt position that SWBI expects to reduce further in Q4 and beyond.