Smith & Wesson Q1 2026 earnings: profit beats forecasts as gun sales surge
Smith & Wesson swung to a profit and topped sales and earnings forecasts, helped by strong demand for pistols and rifles and one-time tariff refunds.
| Q1 2026 | Reported | Expected | Surprise |
|---|---|---|---|
| EPS | $0.06 | -$0.05 | +217.6% |
| Revenue | $112.6M | $100.7M | +11.8% |
Key takeaways
- Smith & Wesson swung to a profit in the quarter, versus a loss a year earlier, and beat Wall Street’s forecasts on both earnings and revenue by a wide margin.
- Net sales climbed about 32% from a year ago, driven by strong shipments of polymer pistols, modern sporting rifles (MSRs), and lever-action rifles.
- Gross margin (the share of each sales dollar left after making the product) improved by nearly 3 percentage points from a year ago; management said roughly half of that gain came from one-time refunds of previously paid import tariffs, not from the underlying business becoming more efficient.
- Newer products introduced in recent years made up over a third of sales, a sign the company’s push into new firearm designs is resonating with buyers rather than relying solely on older, established models.
- Inventory sitting at distributors fell compared with both the prior quarter and the prior year, which the company pointed to as evidence its products are actually selling through to consumers at retail rather than piling up unsold in the supply chain.
- For the current quarter, management guided to sales growth of roughly 10% year-over-year, a more modest pace than the growth just reported.
- Shares rose sharply in after-hours trading following the results, reflecting the scale of the beat relative to depressed expectations going in.
Q1 2026 in context
| Metric | Jul 2026 | Jul 2025 | Change |
|---|---|---|---|
| Revenue | $113M | $85M | +32.3% |
| Net income | $3M | -$3M | +175.9% |
| Free cash flow | -$21M | -$12M | -67.5% |
| Diluted EPS | $0.06 | -$0.08 | +175.0% |
| Gross margin | 28.7% | 25.9% | +2.7 pts |
| Operating margin | 3.7% | -3.5% | +7.2 pts |
| Net margin | 2.3% | -4.0% | +6.3 pts |
Figures for the quarter ended Jul 2026 and the quarter ended Jul 2025, as reported to the SEC.
How the stock took it
Smith & Wesson Brands Inc closed at $12.78 on Sep 2, 2026, the last session before the report, and at $12.89 on Sep 4, 2026, the first session after it — +0.9% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Fundamentals
| Metric | Value | Period |
|---|---|---|
| Gross margin | 26.9% | Trailing 12 months |
| Operating margin | 5.6% | Trailing 12 months |
| Net profit margin | 3.5% | Trailing 12 months |
| Pretax margin | 4.8% | Trailing 12 months |
| EPS | $0.41 | Trailing 12 months |
| Revenue growth (YoY) | 10.4% | Trailing 12 months |
| EPS growth (YoY) | 35.1% | Trailing 12 months |
| Return on equity | 5.0% | Trailing 12 months |
Sources: company report · earnings call · Investing.com