We are very pleased with our third quarter results, which demonstrated continued market share growth while simultaneously maintaining resiliency in our pricing power and profitability.
— Mark Smith, President & CEO
03Detailed Report
SWBI
Smith Wesson Brands Inc
Period
Q3 2026
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 19, 2026
Swipe to view all report sections
Executive Summary
Smith & Wesson Brands reported Q3 FY2026 revenue of $135.7 million, a 17.1% year-over-year increase driven primarily by new handgun product shipments and higher handgun average selling prices (ASP). Gross margin improved to 26.2% (up ~210 bps YoY) and operating margin was 4.8%. GAAP net income was $3.8 million ($0.08 diluted EPS). Operating cash flow was a material positive at $20.5 million for the quarter and free cash flow was $16.8 million. The company continued to focus on inventory reduction and deleveraging: quarter-end cash and short-term investments totaled $23.46 million and total debt was $108.52 million (net debt ~$90.1 million). Management reiterated growth in handguns and a multi-channel push into law enforcement, provided Q4 revenue growth guidance of +10–12% YoY, and reaffirmed a capital spending cadence of $25–30 million for the fiscal year. Key near-term risks include demand volatility, regulatory and tariff headwinds, and a relatively high net-debt-to-EBITDA ratio.
Key Performance Indicators
Revenue
Increasing
135.71M
QoQ: 8.86% | YoY: 4.65%
Gross Profit
Increasing
35.59M
26.23% margin
QoQ: 17.27% | YoY: 3.02%
Operating Income
Decreasing
6.53M
QoQ: 58.57% | YoY: -6.41%
Net Income
Decreasing
3.75M
QoQ: 95.77% | YoY: -9.22%
EPS
Decreasing
0.08
QoQ: 95.37% | YoY: -9.15%
Revenue Trend
Margin Analysis
Financial Highlights
Key financial and operating metrics (USD, Q3 FY2026):
- Revenue: $135.7 million (+17.1% YoY)
- Gross profit: $35.59 million; gross margin 26.2% (up ~210 bps YoY)
- Operating income: $6.53 million; operating margin 4.8%
- EBITDA (GAAP): $13.77 million; management-adjusted EBITDA cited ~$16.8 million
- Net income: $3.75 million; diluted EPS $0.083
- Operating cash flow: $20.46 million
- Free cash flow: $16.82 million (capex ~$3.63 million in quarter)
- Cash & short-term investments: $23.46 million; cash at quarter end: $18.42 million
- Total assets: $538.00 million; total liabilities: $174.59 million; shareholders' equity: $363.42 million
- Total debt: $108.52 million; net debt: ~$90.10 million
- Inventory: $175.26 million (reduced year-over-year; management cites a ~$23m reduction vs prior-year quarter)
- Working capital / liquidity: current ratio ~4.5; quick ratio ~1.35; cash ratio ~0.40
- Profitability: net margin ~2.8%; return metrics remain modest given recent investment and product cycle dynamics
- Leverage: total debt / equity ~0.30; net debt / trailing GAAP EBITDA ~6.5x (useful but elevated; adjusted EBITDA would lower this multiple)
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
135.71M
4.65%
8.86%
Gross Profit
35.59M
3.02%
17.27%
Operating Income
6.53M
-6.41%
58.57%
Net Income
3.75M
-9.22%
95.77%
EPS
0.08
-9.15%
95.37%
Key Financial Ratios
Management Insights Available for Members
Get exclusive access to management commentary, earnings call quotes, and forward guidance from company leadership.
Smith & Wesson Brands, Inc. (SWBI) QQ3 2025 Earnings Analysis: Innovation-led Growth Amid Moderating Demand and Margin Pressure in Industrials/Defense...