Smith Wesson 2026 Q2 Earnings Net Income Plummets 57.8%

Smith & Wesson (SWBI) reported Q2 2026 results with revenue declining 3.9% to $124.67 million, yet beating Wall Street’s revenue estimates. Guidance for Q3 was cautiously optimistic, projecting 8–10% year-over-year growth.

Revenue

Smith & Wesson’s Q2 revenue fell to $124.67 million, a 3.9% decline from $129.68 million in the prior year. Handguns drove the majority of sales, contributing $90.77 million, while long guns added $24.68 million. Other products and services accounted for $9.22 million, reflecting a diversified but slowing revenue stream.

Earnings/Net Income

The company’s net income plummeted to $1.92 million in Q2 2026, a 57.8% drop from $4.55 million in Q2 2025. Earnings per share (EPS) fell 60% to $0.04, underscoring a challenging quarter despite operational efficiencies.

Post-Earnings Price Action Review

The strategy of buying Smith & Wesson shares 30 days after its revenue-raising earnings report and holding for 30 days yielded moderate returns but lagged the market. With a CAGR of 9.34%, it trailed the benchmark by 43.72%. The approach’s minimal risk profile—marked by a 0.00% maximum drawdown and a Sharpe ratio of 0.36—highlighted its conservative nature but limited growth potential.

CEO Commentary

Mark Smith emphasized operational efficiency and new product innovation, with 39% of sales coming from new offerings. He noted handgun market share gains and a 3.5% rise in average selling prices, while acknowledging long gun seasonality challenges. Inventory optimization, down 15% year-on-year, was cited as a key strength.

Guidance

Deana McPherson outlined Q3 expectations: 8–10% revenue growth YoY, gross margin expansion, and operating expenses up 15% due to marketing and SHOT Show costs. Q4 is projected to deliver high single-digit to low double-digit sales growth, with disciplined inventory management and a 28% tax rate.

Additional News

Smith & Wesson declared a $0.13 quarterly dividend, aligning with prior payouts and yielding 5.84% annually. The company filed its Q3 10-Q report, detailing a 3.9% revenue decline and $1.9 million net income. Additionally, the Smith & Wesson Academy, launched in September 2025, reported positive feedback from law enforcement and consumer training programs, signaling long-term engagement strategies.

Financial Health and Strategy

Smith & Wesson’s trailing twelve-month revenue of $471.4 million reflects a -16.4% three-year growth rate. While gross margins dipped to 24.3%, strong liquidity (current ratio of 5.21) and conservative leverage (debt-to-equity of 0.36) underscore resilience. Management prioritizes innovation, inventory optimization, and capital discipline, positioning the firm to navigate macroeconomic uncertainties.

Outlook

With Q3 guidance and a focus on new product cycles, Smith & Wesson aims to capitalize on its brand strength and operational efficiency. However, long gun seasonality and macroeconomic headwinds remain risks. The company’s disciplined approach to cash flow and inventory management could support sustained performance in the second half of fiscal 2026.