Smith & Wesson Brands, Inc. reported a decline in financial performance for the fiscal year ending April 30, 2025, with net sales totaling $474.7 million, a decrease of $61.2 million or 11.4% compared to the previous fiscal year. The company's gross profit also fell by $30.9 million, or 19.6%, resulting in a gross margin of 26.8%, down from 29.5% in the prior year. Net income for the year was $13.4 million, or $0.30 per diluted share, a significant drop from $41.4 million, or $0.89 per diluted share, in fiscal 2024. The decrease in revenue and profitability was attributed to lower consumer demand and a shift in product mix towards lower-margin items.
In terms of operational changes, Smith & Wesson has been undergoing a significant relocation of its headquarters and manufacturing operations to Maryville, Tennessee, which has impacted its financials. The company reported restructuring charges of $1.2 million in fiscal 2025, down from $7.1 million in fiscal 2024. The relocation has also led to a reduction in employee headcount, with the company employing 1,416 individuals as of April 30, 2025. The company has focused on enhancing its product offerings, introducing several new firearms, including the BodyGuard 2.0 and various models of the M&P series, which accounted for 42.8% of net sales.
Smith & Wesson's inventory levels increased by $29.3 million during the fiscal year, reflecting a slowdown in demand and efforts to maintain production capacity. The company anticipates a moderate decline in inventory levels in fiscal 2026. Additionally, the company has been actively repurchasing its shares, buying back 1,844,073 shares for $25.5 million during fiscal 2025, as part of its strategy to return capital to shareholders.
Looking ahead, Smith & Wesson aims to continue its focus on product innovation and market expansion, with plans to invest between $25 million to $30 million in capital expenditures for fiscal 2026. The company is also addressing a material weakness in its internal controls over financial reporting, which was identified in the current fiscal year. Management is implementing a remediation plan to enhance its internal controls and ensure compliance with financial reporting standards. Despite the challenges faced, the company remains committed to its long-term strategy of being a market leader in the firearms industry.
About SMITH & WESSON BRANDS, INC.
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