How did Smith & Wesson's revenue and expenses trend in Q3 2025?

In Q3 2025, Smith & Wesson's revenue was slightly below target due to softer demand and high inflation, while expenses were lower due to reduced production volumes and one-time gains on property sales.

1. Revenue Trend: Smith & Wesson's top-line revenue for Q3 2025 was notably lower than expected, coming in below their target range. This decline was primarily driven by softer consumer demand, especially in the aftermath of the elections, and the ongoing impact of inflation. Despite the introduction of new products, which accounted for over 41% of sales, the decline in core product demand negatively affected revenue.
2. Expense Trend: The company's operating expenses for Q3 2025 were notably lower than the previous year's comparable quarter, primarily due to a $2.3 million gain from the sale of property in Missouri. Excluding this one-time sale, operating expenses were approximately $2.1 million lower, attributed to lower costs associated with relocation and reduced profit-related compensation expenses. However, there was an increase in research and development costs and selling and marketing costs related to promotional activities.

Overall, Smith & Wesson managed to deliver on EPS and EBITDAS expectations due to lower operating expenses and the leverage of their flexible manufacturing model, which ensured profitability despite softer demand conditions.