Smith & Wesson Q3 Sales Up 17.1% to $135.7M, EBITDA Rises 21%
Smith & Wesson’s Q3 net sales rose 17.1% to $135.7M, adjusted EBITDA grew 21% to $16.8M on 28% higher handgun shipments and 5.2% higher ASPs at $419, lifting gross margin to 26.2%. Operating cash flow rose by $30M and debt dropped to $55M, underpinning a 10–12% Q4 sales growth outlook.
1. Q3 Revenue and Profitability
Smith & Wesson reported Q3 net sales of $135.7 million, a 17.1% increase year-over-year, driven by higher unit volumes and resilient pricing. Adjusted EBITDA grew 21% to $16.8 million, while adjusted EPS rose to $0.08 from $0.03, reflecting improved operational efficiency and pricing power.
2. Handgun and ASP Performance
Handgun shipments into the sporting-goods channel jumped 28%, with 44% of shipments from new products, and average selling prices climbed 5.2% to $419. Management highlighted this mix shift and a modest 2–3% price increase as key drivers of market share gains and margin improvement.
3. Cash Flow, Inventory and Debt Reduction
Operating cash flow improved by over $30 million year-over-year, reaching $20.5 million, as inventory declined by $23 million to $175 million. Debt was reduced from $90 million to $75 million during the quarter and further to $55 million post-quarter, bolstering the balance sheet and dividend capacity.
4. Q4 Outlook and Priorities
The company expects Q4 sales to rise 10–12% year-over-year with a slight inventory adjustment and eight additional operating days. Management plans to increase production to meet demand, target further margin gains and maintain distributor inventory at nine weeks of supply.