Smith Wesson 2026 Q1 Earnings Loss Widens, Revenue Drops 3.7%

Smith & Wesson reported its fiscal 2026 Q1 earnings on September 4, 2025, showing a loss of $0.08 per share, a significant widening from a $0.04 loss in the prior year. Despite missing expectations, the company emphasized strong demand for new products and maintained market share, with guidance indicating higher sales in Q2.

Revenue

Smith & Wesson's revenue for Q1 2026 declined 3.7% year-over-year to $85.08 million from $88.33 million in the same period the previous year. The decline was primarily driven by a 28.1% drop in long gun sales. However, the company's handgun segment reported a 35% increase in shipments despite a 2.4% decline in NICS checks. Handguns accounted for the largest share of revenue at $64.94 million, followed by long guns at $13.60 million. Other products and services contributed $6.54 million to total net sales. The company also noted that new products accounted for 37.3% of sales, including the successful Shield Act line.

Earnings/Net Income

Smith & Wesson's losses widened in Q1 2026, with a net loss of $3.41 million, representing an 83.9% increase compared to a $1.85 million loss in the same period last year. Earnings per share (EPS) also deteriorated, with the company reporting a loss of $0.08 per share, a 100.0% increase in losses from $0.04 in the prior year. This marked the company's second consecutive quarter of losses.

Price Action

Following the earnings release, Smith & Wesson's stock experienced modest gains in the short term. The stock rose 2.37% during the latest trading day and was up 4.32% month-to-date. However, it closed flat during the most recent full trading week, indicating mixed investor sentiment.

Post-Earnings Price Action Review

Smith & Wesson reported a 2.37% increase in stock price on the day following the earnings release and a 4.32% gain for the month. Despite the widening losses, the company’s stock managed to outperform broader market trends. Investors appeared to focus on the company's strong demand for new products and market share retention, which were highlighted by the CEO in the earnings call.

CEO Commentary

Mark Smith, President, CEO & Director, expressed optimism about the company's performance in Q1 2026, noting that sales of $85.1 million and EBITDAS of $8 million exceeded expectations. He attributed the success to strong demand for new products and a 35% increase in handgun shipments. Smith emphasized the importance of innovation, with new products accounting for 37.3% of sales, including the successful Shield Act line. He also highlighted the company's plans to leverage the newly reopened Smith & Wesson Academy to enhance customer engagement and training. Looking ahead, Smith expressed confidence in the company's ability to navigate market cycles and maintain leadership in the firearms industry.

Guidance

For Q2 2026, Smith & Wesson expects sales growth to significantly exceed Q1, with revenue expected to be 3% to 5% below Q2 2025. Gross margin is anticipated to remain in line with Q1’s 25.9%, while operating expenses are expected to rise by about 20% due to profit sharing, academy grand opening costs, promotions, and distribution expenses. Capital spending for the year is guided to $25 million to $30 million, with a tax rate of approximately 33%.

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