Q1 2027 Smith & Wesson Brands Inc Earnings Call Transcript
Key Points
- Smith & Wesson Brands Inc (SWBI) delivered a strong first quarter with net sales up 32% year-over-year and adjusted EBITDA up 86%.
- The company gained market share in both handguns and long guns, with unit shipments outpacing NICS growth in each category.
- Average selling prices (ASPs) increased, with handgun ASPs up nearly 9% and long-gun ASPs up over 18% year-over-year, driven by favorable mix and reduced promotional activity.
- The professional channel (law enforcement and international) saw high double-digit growth, supported by investments in the Smith & Wesson Training Academy.
- Channel inventories remained flat or declined, indicating strong retail pull-through and healthy demand for the company's products.
- The company expects second-quarter sales to be roughly 10% above last year, with full-year revenue growth of 5% to 7%.
- The company's full-year revenue guidance of 5% to 7% growth implies a significant deceleration in the back half of the fiscal year, with potential flat to down performance.
- Gross margin expansion was partly driven by $2.9 million in tariff-free funds, which may not be sustainable in future periods.
- Operating expenses increased by $3 million year-over-year due to higher legal, compensation, selling, and advertising costs.
- Cash used in operations was negative $8.8 million in the quarter, impacted by higher inventory builds and profit-related compensation payments.
- The company faces inflationary cost pressures, including higher supplier costs and labor expenses, which could pressure margins.
- Capital spending is elevated at $45-50 million for the year, about $25 million above historical run rate, due to investments in the Springfield facility.
Good day, everyone, and welcome to Smith & Wesson Brands Inc. first quarter fiscal 2027 financial results conference call. This call is being recorded.
At this time, I would like to turn the call over to Kevin Maxwell, Smith & Wesson's General Counsel, who will give us information about today's call. Thank you. You may begin.
Thank you, and good afternoon. Our comments today may contain forward-looking statements. Our use of the words anticipate, project, estimate, expect, intend, believe, and other similar expressions are intended to identify forward-looking statements.
Forward-looking statements may also include statements on topics such as our product development, strategies, market share, demand, consumer preferences, inventory conditions for our products, growth opportunities and trends, and industry conditions in general.
Forward-looking statements represent our current judgment about the future
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