Smith & Wesson's Q1 2026 Earnings: A Mixed Bag

Financial Snapshot

Smith & Wesson's numbers aren't looking great. The gun maker reported $85.1 million in sales for Q1 2026 (ending July 31, 2025). Down 3.7% from last year. They posted $8 million in adjusted EBITDA. The bottom line? A $3.4 million net loss. That's 8¢ per share in the red. Lower revenue, squeezed margins, and rising interest costs seem to be the culprits.

Product Ups and Downs

Handguns are flying off shelves. Up over 35% compared to last year! Kind of surprising when you consider background checks dropped 2.4%. Long guns? Not so hot. They tanked 28.1% in sporting goods channels. Way worse than the broader market's 7.8% decline.

Prices are softening too. Overall prices fell 6.1% from last quarter. Handguns down 4%. Long guns took a bigger hit at 13% lower.

Innovation Push

New products are keeping them afloat. These fresh offerings made up 37.3% of Q1 sales. Big news is their upcoming 30-acre Academy in Tennessee. It's meant for training cops, military folks, and regular gun owners. Smart move.

Behind the Scenes

Distributor inventories are getting leaner. Down over 10% from last quarter and 13,000 fewer units than July 2024. They're watching expenses - spent $680,000 less than last year. More R&D spending, but they cut marketing.

Cash flow looks better. They burned through $8.1 million in operations versus $30.8 million last year. That's a $24 million improvement in working capital.

Jobs in Guns

The firearms world still offers jobs. Not mentioned in the call, but it's worth noting. There's work for instructors, security people, sales staff, engineers. Michigan has openings right now.

This new Academy will probably create specialized training jobs. The NSSF runs a job board just for gun industry careers.

What's Next

For Q2, sales should jump from Q1 but still land 3-5% below last year's Q2. Margins? Probably staying flat. Expenses will climb about 20% though. Partly from profit sharing and getting that Academy up and running.

Tax rate will be around 33%. It's not entirely clear if these projections will hold in such a volatile market.