Q3 2026 Smith & Wesson Brands Inc Earnings Call

March 5, 2026

Speaker #2: At this time, I would like to turn the call over to Kevin Maxwell, Smith & Wesson's general counsel, who will give us some information about today's call.

Speaker #2: 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.

Kevin A. Maxwell: Thank you. 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 and are subject to risks and uncertainties that could cause our actual results to differ materially from those expressed or implied by our statements today. These risks and uncertainties are described in our SEC filings, which are available on our website along with a replay of today's call. We have no obligation to update forward-looking statements. We reference certain non-GAAP financial results.

Speaker #2: 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.

Speaker #2: Forward-looking statements represent our current judgment about the future and are subject to risks and uncertainties that could cause our actual results to differ materially from those expressed or implied by our statements today.

Speaker #2: These risks and uncertainties are described in our SEC filings, which are available on our website along with a replay of today's call. We have no obligation to update forward-looking statements.

Speaker #2: We reference certain non-GAAP financial results. Reconciliations of GAAP financial measures to non-GAAP financial measures can be found in our SEC filings and in today's earnings press release, each of which is available on our website.

Kevin A. Maxwell: Reconciliations of GAAP financial measures to non-GAAP financial measures can be found in our SEC filings and in today's earnings press release, each of which is available on our website. When we reference EPS, we are always referencing fully diluted EPS, and any reference to EBITDA is to adjusted EBITDA. Before I hand the call over to our speakers, I would like to remind you that when we discuss NICS results, we are referring to adjusted NICS, a metric published by the National Shooting Sports Foundation based on FBI NICS data. Adjusted NICS removes those background checks conducted for purposes other than firearms purchases. Adjusted NICS is generally considered the best available proxy for consumer firearm demand at the retail counter.

Speaker #2: Also, when we reference EPS, we are always referencing fully diluted EPS. And any reference to EBITDA is to adjusted EBITDA. Before I hand the call over to our speakers, I would like to remind you that when we discuss NICS results, we are referring to those published by the National Shooting Sports Foundation based on FBI NICS data.

Speaker #2: Adjusted NICS removes those background checks conducted for purposes other than firearms purchases. Adjusted NICS is generally considered the best available proxy for consumer firearm demand at the retail counter.

Kevin A. Maxwell: Because we transfer firearms only to law enforcement agencies and federally licensed distributors and retailers and not to end consumers, NICS generally does not directly correlate to our shipments or market share in any given time period, we believe mostly due to inventory levels in the channel. Joining us on today's call are Mark Smith, our President and CEO, and Deena McPherson, our CFO. With that, I will turn the call over to Mark.

Speaker #2: Because we transfer firearms only to law enforcement agencies and federally licensed distributors and retailers and not to end consumers, NICS generally does not directly correlate to our shipments or market share in any given time period.

Speaker #2: We believe mostly due to inventory levels in the channel. Joining us on today's call are Mark Smith, our president and CEO, and Deana McPherson, our CFO.

Speaker #2: With that, I will turn the call over to

Mark P. Smith: Thank you, Kevin. Thanks everyone for joining us today. We are very pleased with our Q3 results, which demonstrated continued market share growth while simultaneously maintaining resiliency in our pricing power and profitability. This is a direct function of the entire team's discipline in staying focused and executing against our long-term strategy. The strength of the iconic Smith & Wesson brand, along with our laser focus on innovating to keep ahead of market trends, once again drove impressive average selling prices in the Q3, which together with increased unit shipments delivered not only solid top-line performance, but also translated into both strong profit margins and balance sheet performance. Our Q3 performance exceeded our expectations across the board. Net sales increased over 17% year-over-year to nearly $136 million.

Speaker #2: Mark.

Speaker #3: Thank you, Kevin. And thanks, everyone, for joining us today. We are very pleased with our third quarter results, which demonstrated continued market share growth while simultaneously

Speaker #3: Power and profitability. This is a direct function of the entire team's discipline in staying focused and executing against our long-term strategy. The strength of the iconic Smith & Wesson brand, along with our laser focus on innovating to keep ahead of market trends, once again drove impressive average selling prices in the quarter, which, together with increased unit shipments, delivered not only solid top-line performance but also translated into both strong profit margins and balance sheet performance.

Speaker #3: Our Q3 performance exceeded our expectations across the board. Net sales increased, maintaining resiliency in our pricing, 17% year over year to nearly $136 million.

Mark P. Smith: EBITDA of $16.8 million was up nearly 21%. Adjusted EPS of $0.08 compared with $0.03 in the prior year period. Importantly, we also delivered another quarter of significant growth in operating cash flow, which is up more than $30 million year-over-year. We believe our purposeful deployment of capital will allow us to continue consistently delivering long-term value for our stockholders. Looking at our performance by category, our handgun results were exceptional. Our unit shipments of handguns into the sporting goods channel were up 28%, while NICS was down 2.2%. With distributor inventory weeks of supply remaining flat during the period, this indicates significant market share growth.

Speaker #3: EBITDA of $16.8 million was up nearly 21%, and adjusted EPS of $0.08 compared with $0.03 in the prior year period. Importantly, we also delivered another quarter of significant growth in operating cash flow, which is up more than $30 million year over year.

Speaker #3: We believe our purposeful deployment of capital will allow us to continue consistently delivering long-term value for our stockholders. Looking at our performance by category, our handgun results were exceptional.

Speaker #3: Our unit shipments of handguns into the sporting goods channel were up 28%, while NICS was down 2.2%. With distributor inventory weeks of supply remaining flat during the period, this indicates significant market share growth.

Mark P. Smith: This outstanding performance was driven by several factors, including strong demand for our newer products, a favorable shift in product mix towards higher price models, robust consumer demand, and the benefit of a modest 2% to 3% price increase that we implemented late in the quarter on 1 January. Notably, we saw this growth across our entire semi-auto pistol line, indicating that the hard work that the team has been putting in on marketing messaging, targeted promotions, and new product development execution across the line is paying dividends. Performance in long guns was consistent with our strategic positioning in the market, and we were pleased with our performance in the categories where we actively compete. For the quarter, our long gun shipments into the sporting goods channel were down 25%, while overall NICS was down 5.6%.

Speaker #3: This outstanding performance was driven by several factors, including strong demand for our newer products, a favorable shift in product mix, towards higher price models, robust consumer demand, and the benefit of a modest 2 to 3 percent price increase that we implemented late in the quarter on January 1st.

Speaker #3: Notably, we saw this growth across our entire semi-auto pistol line, indicating that the hard work that the team has been putting in on marketing messaging, targeted promotions, and new product development execution across the line is paying dividends.

Speaker #3: Performance in long guns was consistent with our strategy in the categories where we actively compete. For the quarter, our long gun shipments into the sporting goods channel were down 25%, while overall NICS was down 5.6%.

Mark P. Smith: However, we believe this is largely due to channel fill in the prior year period with several new caliber introductions on our higher-end Model 1854 lever-action rifle products, combined with the relative outperformance in the industry of the hunting segment versus the self-defense segment, where our product line is more heavily weighted. Diving a little deeper into innovation, new products represented 44% of handgun shipments and 28% of long gun shipments during the quarter. In handguns, while we continue to have success with the Bodyguard platform, as I just mentioned, the growth we experienced in Q3 was across the entire line of our semi-auto pistols, where we introduced several new models outside the subcompact space, most of which are positioned at higher price points.

Speaker #3: However, we believe this is largely due to channel fill in the prior year period with several new caliber introductions on our higher-end 1854 lever action rifle products combined with the relative outperformance in the industry of the hunting our product line is more heavily weighted.

Speaker #3: Diving a little deeper into innovation, new products represented 44% of handgun shipments in 28% of long gun shipments during the quarter. In handguns, while we continue to have success with the bodyguard platform, as I just mentioned, the growth we experienced in Q3 was across the entire line of our semi-auto pistols, where we introduced several new models outside the subcompact space.

Speaker #3: Most of which are positioned at higher price points. Once again, I'm incredibly proud of our award-winning product management, engineering, design, and production teams, who consistently deliver products that resonate with consumers while meeting their expectations of world-class quality and reliability associated with our legendary brand.

Mark P. Smith: Once again, I'm incredibly proud of our award-winning product management, engineering, design, and production teams who consistently deliver products that resonate with consumers while meeting their expectations of world-class quality and reliability associated with our legendary brand. Driven by this mixed shift, and as I mentioned earlier, we were again pleased to continue seeing strong overall average selling prices in the handgun category, with ASPs up 5.2% versus a year ago to over $419 and also above Q2 levels. On the long gun side, ASPs were also strong at $535, although down about 11% versus a year ago. Similarly, NICS was the primary driver here, as I just mentioned, with the year-ago period including the channel fill of higher-priced new product introductions on the 1854 rifles.

Speaker #3: Driven by this mixed shift and, as I mentioned earlier, we were again pleased to continue seeing strong overall average selling prices in the handgun category.

Speaker #3: With ASPs up 5.2% versus a year ago to over $419, and also above Q2 levels. On the long gun side, ASPs were also strong at $535, although down about 11% versus a year ago.

Speaker #3: Similarly, mixed with the primary driver here, as I just mentioned, with the year-ago period including the channel fill of higher-priced new product introductions on the 1854 rifles.

Mark P. Smith: For both categories, the strength of the Smith & Wesson brand and our ability to ensure our product assortment is aligned to market trends continues to allow us to maintain healthy pricing and profitability while only participating selectively in promotions. Turning now to our balance sheet, we continue to make significant progress reducing our debt and further strengthening our financial position. We ended Q3 with $75 million in debt versus $90 million at the end of Q2. We paid down an additional $20 million subsequent to the end of Q3. We were pleased with our internal inventory position of $175 million, which was down $23 million versus last Q3, resulting in excellent cash generation in the period of over $20 million.

Speaker #3: For both categories, the strength of the SMITH & WESSON brand and our ability to ensure our product assortment is aligned to market trends continues to allow us to maintain healthy pricing and profitability while only participating selectively in promotions.

Speaker #3: Turning now to our balance sheet, we continue to make significant progress reducing our debt and further strengthening our financial position. We ended Q3 with $75 million in debt versus $90 million at the end of Q2, and we paid down an additional $20 million subsequent to the end of Q3.

Speaker #3: We were pleased with our internal inventory position of 175 million dollars, which was down 23 million dollars versus last Q3, resulting in excellent cash generation in the period of over 20 million dollars.

Mark P. Smith: I'd like to once again commend the team for their hard work on our disciplined process for aligning production to sales expectations across the product portfolio, which drove these results. We're also very pleased with our distributor inventory levels, which remained flat in terms of weeks of supply, maintaining at approximately nine weeks throughout the quarter, right in line with our target. With our strong sales in the period, this indicates solid sell-through of our products at the retail counter. Before I turn the call over to Deana, I wanna touch on a couple of additional points. First, we attended the annual industry SHOT Show in Las Vegas at the end of the quarter, where we were very pleased with customer feedback on our performance, product portfolio, and forward strategy.

Speaker #3: I'd like to once again commend the team for their hard work on our disciplined process for aligning production and sales expectations across the product portfolio, which drove these results.

Speaker #3: And we're also very pleased with our distributor inventory levels, which remain flat in terms of weeks of supply, maintaining at approximately nine weeks throughout the quarter, right in line with our target.

Speaker #3: With our strong sales in the period, this indicates solid sell-through of our products at the retail counter. Before I turn the call over to Deana, I want to touch on a couple of additional points.

Speaker #3: First, we attended the annual industry shop show in Las Vegas at the end of the quarter, where we were very pleased with customer feedback on our performance, product portfolio, and forward strategy.

Mark P. Smith: This feedback, combined with our recent results and strong outlook for the remainder of the fiscal year, which Deana will cover in a moment, indicates we are winning in the marketplace. Looking forward, we will continue to be laser-focused on execution across the business in sustaining these gains. Next, the Smith & Wesson Academy, which launched just 6 months ago, along with our focus on the professional channel, is already exceeding our expectations. Thanks to the hard work of our academy staff and law enforcement sales team, and the ongoing success of our purpose-built, rugged, and reliable duty weapons, we are not only growing in the consumer channel, but also gaining significant momentum on the law enforcement side.

Speaker #3: This feedback, combined with our recent results and strong outlook for the remainder of the fiscal year, which Gina will cover in a moment, indicates we are winning in the marketplace.

Speaker #3: And looking forward, we will continue to be laser-focused on execution across the business and sustaining these gains. Next, the Smith & Wesson Academy, which launched just six months ago, along with our focus on the professional channel, is already exceeding our expectations.

Speaker #3: Thanks to the hard work of our academy staff and law enforcement sales team, and the ongoing success of our purpose-built, rugged, and reliable duty weapons, we are not only growing in the consumer channel but also gaining significant momentum on the law enforcement side.

Mark P. Smith: You may have seen that we were awarded a number of large agency orders recently, and as a matter of fact, have shipped to nearly 1,000 separate federal, state, and local law enforcement agencies just within the past 18 months. With a strong sales pipeline and growing momentum, we're very pleased with the results to date, and beyond proud and humbled to be trusted by these men and women with the tools they need to come home safe to their families every day as they put themselves in harm's way to protect and serve our country and our communities. In summary, momentum is strong and building, and our brand and product assortment are driving continued healthy profitability, and we remain confident in the direction and trajectory of our business against the backdrop of a healthy and stable market.

Speaker #3: You may have seen that we were awarded a number of large agency orders recently, and as a matter of fact, have ships to nearly 1,000 separate federal, state, and local law enforcement agencies just within the past 18 months.

Speaker #3: With a strong sales pipeline and growing momentum, we're very pleased with the results today, and beyond proud and humbled to be trusted by these men and women with the tools they need to come home safe to their families every day, as they put themselves in harm's way to protect and serve our country and our communities.

Speaker #3: In summary, momentum is strong and building, and our brand and product assortment are driving continued healthy profitability. We remain confident in the direction and trajectory of our business against the backdrop of a healthy and stable market.

Mark P. Smith: We continue to lead with a proven innovation strategy that consistently resonates with consumers. Backed by the powerful Smith & Wesson brand, along with our commitment to operational excellence and maintaining a strong balance sheet, we are well-positioned to continue winning in the marketplace and delivering long-term value to our stockholders. As always, I wanna thank our entire team of talented Smith & Wesson employees for their tireless dedication in putting their skills to work each and every day to make us successful. With that, I'll turn the call over to Deana McPherson to cover the financials.

Speaker #3: We continue to lead with a proven innovation strategy that consistently resonates with consumers, backed by the powerful SMITH & WESSON brand, along with our commitment to operational excellence and maintaining a strong balance sheet.

Speaker #3: We are well positioned to continue winning in the marketplace and delivering long-term value to our stockholders. As always, I want to thank our entire team of talented Smith & Wesson employees for their tireless dedication and for putting their skills to work each and every day to make us successful.

Speaker #3: With that, I'll turn the call over to Deana to cover the financials.

Deana L. McPherson: Thanks, Mark. Please note that all comparisons are between the Q3 of fiscal 2026 and the Q3 of fiscal 2025, unless stated otherwise. Net sales for our Q3 of $135.7 million were $19.8 million, or 17.1% above the prior year on the strength of our new handgun products. During the quarter, distributor inventory in terms of actual units increased by approximately 20% over the end of the prior quarter, but only by about 4% compared with the end of January 2025, with weeks of supply remaining steady at approximately nine weeks. We believe, based on feedback from our customers, that strong demand for our products will continue in the coming months. Handgun ASPs were up slightly versus Q2 levels due to continued strong demand for certain premium products, but offset by the strength of certain of our lower-priced products.

Speaker #1: Thanks, Mark. Please note that all comparisons are between the third quarter of fiscal 2026 and the third quarter of fiscal 2025 unless stated otherwise.

Speaker #1: Net sales for our third quarter of $135.7 million were $19.8 million, or 17.1%, above the prior year on the strength of our new handgun products.

Speaker #1: During the quarter, distributor inventory in terms of actual units increased by approximately 20% over the end of the prior quarter, but only by about 4% compared with the end of January 2025, with weeks of supply remaining steady at approximately nine weeks.

Speaker #1: We believe based on feedback from our customers that strong demand for our products will continue in the coming months. Handgun ASPs were up slightly versus Q2 levels due to continued strong demand for certain premium products, but offset by the strength of certain of our lower-priced products.

Deana L. McPherson: Long gun ASPs decreased by about 11% due to lower overall volume of certain of our higher-priced products, driven by channel fill for new products in the prior year, as Mark covered earlier. Gross margin of 26.2% was up 210 basis points over the prior year on increased production volume, combined with lower promotion costs and lower Federal Excise Taxes, partially offset by a 160 basis point negative impact from tariffs. Having focused on driving inventory levels down over the last 12 months, we are now turning our focus to increasing production to meet market demand, which should continue to have a positive impact on margins. Operating expenses of $28.9 million were $5.7 million higher than the prior year, due primarily to a $2.3 million gain on the sale of real estate that was recorded last year.

Speaker #1: Long gun ASPs decreased by about 11% due to lower overall volume of certain of our higher-priced products driven by channel fill for new products in the prior year as Mark covered earlier.

Speaker #1: Gross margin of 26.2% was up 210 basis points over the prior year on increased production volume, combined with lower promotion costs and lower federal excise taxes, partially offset by a 160 basis point negative impact from tariffs.

Speaker #1: Having focused on driving inventory levels down over the last 12 months, we are now turning our focus to increasing production to meet market demand which should continue to have a positive impact on margins.

Speaker #1: Operating expenses of $28.9 million were $5.7 million higher than the prior year, due primarily to a $2.3 million gain on the sale of real estate that was recorded last year.

Deana L. McPherson: Increased profit-related and stock-based compensation expense contributed to the remaining increase. Higher revenue and related margin resulted in net income of $3.8 million compared with $2.1 million in the prior year period. GAAP earnings per share in Q3 was $0.08 compared with $0.05 a year ago. On a non-GAAP basis, earnings per share was $0.08 compared with $0.03 a year ago. Cash generated from operations during Q3 was $20.5 million compared with cash used from operations of $9.8 million in the prior year Q. This was due primarily to lower inventory, which decreased $7.9 million during this quarter versus an increase of $2.9 million in the prior year Q. We spent $3.6 million in capital projects in Q3 compared with $6.3 million a year ago.

Speaker #1: Increased profit-related and stock-based compensation expense contributed to the remaining increase. Higher revenue and related margin resulted in net income of $3.8 million compared with $2.1 million in the prior year period.

Speaker #1: GAAP earnings per share in the third quarter was $0.08, compared with $0.05 a year ago. On a non-GAAP basis, earnings per share was $0.08, compared with $0.03 a year ago.

Speaker #1: Cash generated from operations during the third quarter was $20.5 million, compared with cash used from operations of $9.8 million in the prior year quarter.

Speaker #1: This was due primarily to lower inventory which decreased 7.9 million dollars during this quarter versus an increase of 2.9 million dollars in the prior year quarter.

Speaker #1: We spent $3.6 million on capital projects in the third quarter, compared with $6.3 million a year ago. We expect our capital spending for the year to be between $25 million and $30 million.

Deana L. McPherson: We expect our capital spending for the year to be between 25 and $30 million. We paid $5.8 million in dividends and ended the quarter with $23.5 million in cash and investments and $75 million in borrowings on our line of credit. Subsequent to the end of the quarter, we repaid $20 million on our line, bringing our outstanding borrowings down to $55 million. Finally, our board has authorized our $0.13 quarterly dividend to be paid to stockholders of record on 19 March, with payment to be made on 2 April. Looking forward to Q4, we believe the strength of our brand, product assortment, and new product offerings are helping us drive growth and take share in an otherwise stable market.

Speaker #1: We paid 5.8 million dollars in dividends and ended the quarter with 23.5 million dollars in cash and investments and 75 million dollars in borrowings on our line of credit.

Speaker #1: Subsequent to the end of the quarter, we repaid $20 million on our line, bringing our outstanding borrowings down to $55 million. Finally, our board has authorized our 13-cent quarterly dividend to be paid to stockholders of record on March 19th, with payment to be made on April 2nd.

Speaker #1: Looking forward to the fourth quarter, we believe the strength of our brand, product assortment, and new product offerings are helping us drive growth and take share in an otherwise stable market.

Deana L. McPherson: Therefore, we expect our Q4 sales will be up 10% to 12% over Q4 2025 sales, with a small reduction in channel inventory as distributors begin to plan for the slower summer months. With 8 additional operating days compared with Q3 and an increase in production to meet demand, we expect Q4 gross margin to increase by several percentage points over Q3 and a point or 2 over last year's Q4. Operating expenses in Q4 will likely be about 10% higher than last year's Q4 due to increases in research and development costs, stock compensation, profit sharing, and other profit-related costs. Additionally, we expect continued healthy cash generation during the Q4. Our effective tax rate is expected to be approximately 29%. With that, operator, can we please open the call to questions from our analysts?

Speaker #1: Therefore, we expect our fourth quarter sales will be up 10 to 12 percent over Q4 2025 sales with a small reduction in channel inventory as distributors begin to plan for the slower summer months.

Speaker #1: With eight additional operating days compared with Q3, and an increase in production to meet demand, we expect Q4 gross margin to increase by several percentage points over Q3 and a point or two over last year's fourth quarter.

Speaker #1: Operating expenses in Q4 will likely be about 10% higher than last year's fourth quarter due to increases in research and development costs, stock compensation, profit sharing, and other profit-related costs.

Speaker #1: Additionally, we expect continued healthy cash generation during the fourth quarter. Our effective tax rate is expected to be approximately 29%. With that operator, can we please open the call to questions from our analysts?

Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Mark Smith with Lake Street Capital. Please proceed.

Speaker #2: Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Speaker #2: You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker #2: Our first question is from Mark Smith with Lake Street Capital. Please proceed.

Mark P. Smith: Hi, guys. I want to ask first about kind of recent pricing changes. Can you talk about, you know, any price that's been taken, whether that's been across the board, and anything that you can quantify?

Mark Smith: Hi, guys. I want to ask first about kind of recent pricing changes. Can you talk about, you know, any price that's been taken, whether that's been across the board, and anything that you can quantify?

Speaker #3: Hi guys. I want to ask first about kind of recent pricing changes. Can you talk about any price that's been taken, whether that's been across the board and anything that you can quantify?

Mark P. Smith: Certainly, Mark. The price increase we put in was effective January first, as I covered in the prepared remarks, and it was largely across the board. It was, you know, there was some categories that took a little bit steeper increase and some categories took a little bit less so, just really driven on, you know, market demand and our position within each category. Overall, across the board, it was pretty close to 3%.

Speaker #4: Sure. Hey, Mark. The price increase we put in was effective January 1st, as I covered in the prepared remarks, and it was largely across the board.

Speaker #4: It was there was some categories that took a little bit steeper increase and some categories took a little bit less so. It was just really driven on market demand and our position within each category.

Speaker #4: But overall, across the board, it was pretty close to 3%.

Mark P. Smith: Okay. Any feedback, you know, for as you look at distributors or as you think about kind of consumers on that, does it seem like that's gone through well, or has there been any pushback on the pricing?

Mark Smith: Okay. Any feedback, you know, for as you look at distributors or as you think about kind of consumers on that, does it seem like that's gone through well, or has there been any pushback on the pricing?

Speaker #3: Okay. Any feedback as you look at distributors or as you think about kind of consumers on that? Does it seem like that's gone through well, or has there been any pushback on the pricing?

Mark P. Smith: No, it's no pushback whatsoever. It's, you know, as you may recall, it's been, you know, it's been a little bit since we've taken a price increase, you know, and really has gone through smoothly. No impact whatsoever. I think as you saw from the results, you know, actually an uptick in demand throughout the quarter.

Speaker #4: No, it's no pushback whatsoever. As you may recall, it's been a little bit since we've taken a price increase, and really, it has gone through smoothly.

Speaker #4: No impact whatsoever. And I think, as you saw from the results, actually an uptick in demand. Throughout the quarter, so.

Mark P. Smith: Perfect. I wanted to look at just handgun sales, really strong results there, especially as we think about new products. I'm curious, you know, without giving out too much competitive, you know, details here, you know, anything that you can expand on what's kind of helped drive some of that strength. You know, I'm curious, like, colorways, you know, some of your ported options, or are these things that have helped, or is there just, you know, having the right product for consumers right now?

Mark Smith: Perfect. I wanted to look at just handgun sales, really strong results there, especially as we think about new products. I'm curious, you know, without giving out too much competitive, you know, details here, you know, anything that you can expand on what's kind of helped drive some of that strength. You know, I'm curious, like, colorways, you know, some of your ported options, or are these things that have helped, or is there just, you know, having the right product for consumers right now?

Speaker #3: Perfect. And I wanted to look at just handgun sales—really strong results there. Especially as we think about new products, I'm curious, without giving out too much competitive detail here, is there anything that you can expand on regarding what's kind of helped drive some of that strength?

Speaker #3: I'm curious, like colorways, some of your ported options, or these things that have helped, or is there just having the right product for consumers right now?

Mark P. Smith: Yeah. You know we've had great success with the Bodyguard over the last, you know, really the last couple of years. You know, at that category, we kind of own it. You know, we've done a lot of work and, you know, that strategy I talk about a lot, long-range strategy is, you know, let's make sure we're refreshing the entire product line. You know, I think we're starting to see the results of that, you know. It's really just, it's across the board. It's all of what you just talked about, markets. You know, obviously, we're not going to give too much detail for the reason you just covered.

Speaker #4: Yeah, you know, we've had great success with the Bodyguard over the last, really, last couple of years. At that category, we kind of own it.

Speaker #4: And we've done a lot of work on that strategy I talked about. We're refreshing the entire product line, and I think we're starting to see the results of that.

Speaker #4: And it's really just—it's across the board, it's all of what you just talked about: markets. And obviously, we're not going to give too much detail, for the reason you just covered, but it's looking at the market trends and having a team that really understands the industry and what is trending out there—where do we need to make some updates and changes, and making those changes.

Mark P. Smith: It's looking at the market trends and, you know, having a team that really understands, you know, the industry and, you know, what is trending out there, you know, where do we need to make some updates and changes, and making those changes. We've been really happy with the results that are coming out with that. Now that that polymer pistol line across the board is really starting to gain a lot of profitable share. You know, obviously, as we start to move now into more of the, you know, out of the subcompact into the compact and full-size markets, you know, that's obviously at the higher end of the pricing hierarchy, and that is really helping ASPs and, you know, the momentum continues.

Speaker #4: And we've been really happy with the results that are coming out with that. And now that polymer pistol line across the board is really starting to gain a lot of profitable share.

Speaker #4: And obviously, as we start to move now into more of the out of the subcompact into the compact and full-size markets, that's obviously at the higher end of the pricing hierarchy.

Speaker #4: And that is really helping ASPs and the momentum continues.

Mark P. Smith: Perfect. Then just similar question shifting over to long guns. You know, I'm curious, anything that you guys can do today to kind of drive, you know, more strength in that long gun market? I realize there's some things in the comparable that make this quarter tough, but, you know, as we think about, you know, the hunting category, is there interest in entering there? You know, is there more maybe on SBRs or anything that you can do to drive more long gun business?

Mark Smith: Perfect. Then just similar question shifting over to long guns. You know, I'm curious, anything that you guys can do today to kind of drive, you know, more strength in that long gun market? I realize there's some things in the comparable that make this quarter tough, but, you know, as we think about, you know, the hunting category, is there interest in entering there? You know, is there more maybe on SBRs or anything that you can do to drive more long gun business?

Speaker #3: Perfect. And then just similar question, shifting over to long guns. I'm curious, anything that you guys can do today to kind of drive more strength in that long gun market?

Speaker #3: And I realize there are some things in the comparable that make this quarter tough, but as we think about the hunting category, is there interest in entering there?

Speaker #3: Is there more, maybe on SBRs, or anything that you can do to drive more long gun business?

Mark P. Smith: Yeah, the SBRs, as you're well aware, the tax stamp changes that occurred on January first are helping a little bit there, in that category. You know, at the end of the day, it's, as I covered in the prepared remarks, it really is, you know, one is the difficult comp versus last year as we were introducing kind of the, you know, the last couple calibers on the lever action rifle, which obviously are at the very high end of our, of our pricing hierarchy on long guns. Also that, you know, our product portfolio is kind of more, you know, weighted towards that self-defense market. You know, the hunting market, obviously, we're in it with the Model 1854 and very pleased with the performance there.

Speaker #4: Yeah. The SBRs, as you're well aware, the tax changes that occurred on January 1st are helping a little bit there in that category. But at the end of the day, as I covered in the prepared remarks, it really is—it's one of the difficult comps versus last year, as we were introducing kind of the last couple of calibers on the lever action rifle, which obviously are at the very high end of our pricing hierarchy on long guns.

Speaker #4: But also that our product portfolio is kind of more weighted towards that self-defense market. And the hunting market, obviously, we're in it with the 1854 and very pleased with the performance there.

Mark P. Smith: There's, I'll just leave it at this, is there's a lot of white space there for us, and we're always looking at long-term opportunities.

Speaker #4: But there's I'll just leave it at this. There's a lot of white space there for us, and we're always looking at long-term opportunities.

Mark P. Smith: Perfect. I think the last one for me, you called it out a bit in your commentary, just the law enforcement opportunity and improving sales there. You know, I'm curious just, you know, where you're at in that process. It seems like, you know, that's a big market and we're maybe just scratching the surface. You know, is that something that is a big focus and where you think you can really move the needle on revenue as there's more drive in law enforcement? Similarly, I'm curious as we think about maybe international, within military, if there are similar opportunities.

Mark Smith: Perfect. I think the last one for me, you called it out a bit in your commentary, just the law enforcement opportunity and improving sales there. You know, I'm curious just, you know, where you're at in that process. It seems like, you know, that's a big market and we're maybe just scratching the surface. You know, is that something that is a big focus and where you think you can really move the needle on revenue as there's more drive in law enforcement? Similarly, I'm curious as we think about maybe international, within military, if there are similar opportunities.

Speaker #3: Perfect. And I think the last one for me, you called it out a bit in your commentary just the law enforcement opportunity and improving sales there.

Speaker #3: I'm curious just where you're at in that process. It seems like that's a big market and we're maybe just scratching the surface. Is that something that is a big focus, and where you think you can really move the needle on revenue as there's more drive in law enforcement?

Speaker #3: And then similarly, I'm curious as we think about maybe international within military if there are similar opportunities.

Mark P. Smith: Yeah, it's definitely a focus area. As I think you've been around long enough now you know that's a lot much longer sales cycle than on the consumer side. You know, what I'm pleased about is the pipeline that we have, even with the, you know, strong results this quarter. You know, we've got a pretty healthy pipeline coming up behind it. You know, that is a direct result of, you know, all of the intangibles of, you know, the Smith & Wesson Academy and being able to service that law enforcement customer in a more meaningful way. Purpose-built products, you know, changes to the product. There's innovation happening there as well. You know, that extends beyond just, you know, domestic law enforcement.

Speaker #4: Yeah, it's definitely a focus area, as I think you've been around long enough now. You know that's a much longer sales cycle than on the consumer side.

Speaker #4: So what I'm pleased about is the pipeline that we have even with the strong results this quarter. We've got a pretty healthy pipeline coming up behind it.

Speaker #4: And that is a direct result of all of the intangibles of the academy and being able to service that law enforcement customer. In a more meaningful way, purpose-built products, changes to the product.

Speaker #4: There's innovation happening there as well. And that expands beyond just domestic law enforcement. It moves into federal agencies—state, local, and federal—and then outside into foreign militaries as well.

Mark P. Smith: It, you know, moves into federal agencies, state, local, and federal, and then outside, you know, into foreign militaries as well. A lot of good things happening in that space. Still does remain kind of a smaller section of our business right now. A lot of momentum there and a pretty healthy pipeline coming up behind it.

Speaker #4: So a lot of good things happening in that space. Still does remain kind of a smaller section of our business right now, but a lot of momentum there and a pretty healthy pipeline coming up behind it.

Mark P. Smith: Excellent. Thank you, guys.

Mark Smith: Excellent. Thank you, guys.

Speaker #3: Excellent. Thank you, guys.

Mark P. Smith: Thanks, Mark.

Speaker #4: Thanks, Mark.

Operator: Our next question is from Rommel Dionisio with Aegis Capital. Please proceed. Rommel, please check and see if your line is muted. I believe he was having some technical difficulties. We do not have any further questions at this time. I would like to turn the conference back over to Mark for closing remarks.

Speaker #1: Our next question is from Romell Dionisio with Aegis Capital. Please proceed. Romell, please check and see if your line is muted. I believe he was having some technical difficulties.

Speaker #1: We do not have any further questions at this time. I would like to turn the conference back over to Mark for closing remarks.

Mark P. Smith: Thank you, operator, and thanks everyone for joining us today and your interest in Smith & Wesson. We look forward to speaking with you all again next quarter.

Speaker #4: Thank you, operator. And thanks, everyone, for joining us today and your interest in Smith & Wesson. We look forward to speaking with you all again next quarter.

Operator: Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.

Q3 2026 Smith & Wesson Brands Inc Earnings Call

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