Smith & Wesson Q1 Handgun Shipments Jump

Smith & Wesson’s fiscal first-quarter 2026 results caught my eye last week - they managed $85.1 million in net sales with an adjusted EBITDA of $8 million. Not bad considering they actually faced a 3.7% year-over-year revenue decline. What’s truly remarkable is how their core handgun shipments surged over 35% compared to last year, dramatically outpacing overall industry demand. Meanwhile, average selling prices dropped 6.1% sequentially as everyone in the firearms space seems locked in a promotional battle royale.

I’m particularly intrigued by their strategic pivot - relaunching the Smith & Wesson Academy while providing detailed guidance for the upcoming quarter ending October 31, 2025.

Handguns Outperforming Despite Retail Slump

Their handgun shipments to sporting goods retailers jumped 35% year-over-year while industry-wide demand (measured by background checks) actually fell 2.4%. That’s impressive market share capture. Meanwhile, their long gun shipments plummeted 28.1% - but that makes sense given their minimal presence in shotguns and bolt-action rifles, segments currently struggling.

CEO Mark Peter Smith couldn’t contain his enthusiasm: “During the first quarter, our performance in handguns was exceptional. With our shipments into the sporting goods channel increasing just over 35% year on year, versus NICS being down 2.4%.”

This suggests Smith & Wesson can leverage their brand loyalty to capture market share even as overall firearm demand weakens. I wonder if this is sustainable or just a temporary advantage.

Innovation Driving Sales Mix

New products made up 37.3% of their total sales - a healthy sign their R&D investments are paying off. The Shield X pistol launch in July seems to be gaining traction, with more products in the pipeline for both handguns and lever-action rifles.

Smith boasted: “Innovation remains a cornerstone of that strategy, with new products accounting for 37.3% of sales in the first quarter.”

This focus on innovation might help them maintain pricing power even as the industry faces cyclical challenges. Still, I question whether they can keep this pace of successful new product introductions.

Academy Revival as Customer Acquisition Strategy

The revived Smith & Wesson Academy at their Tennessee facility spans nearly 30 acres with purpose-built ranges and expert-led training. They’ve appointed a former Navy SEAL to lead it, offering free access to institutional clients and civilian courses.

“Today, I’m thrilled to announce that the Smith & Wesson Academy is back. Better than ever,” Smith declared.

I see this as a clever move to strengthen relationships with government and commercial clients while building brand loyalty. By engaging directly with customers through education, they’re creating emotional connections that transcend mere product transactions. Yet I wonder about the ROI on this substantial investment.

Looking Ahead

Management expects Q2 sales to increase from Q1 but remain 3-5% below last year’s Q2. Gross margins are projected to stay flat at around 25.9%, hampered by lower absorption and steel tariffs. Operating expenses will jump roughly 20% sequentially due to profit sharing, Academy launch costs, and increased sales activities.

Capital expenditures for fiscal 2026 are projected between $25-30 million, and they’re maintaining their 13¢ quarterly dividend.

While their handgun strategy seems to be working, I’m concerned about continued pressure on margins and their ability to maintain market share gains if overall industry demand continues to soften.