• Q2 Net Sales of $124.7 Million
• Q2 Gross Margin of 24.3%
• Q2 EPS of $0.04/Share; Q2 Adjusted EPS of $0.04/Share
• Q2 Net Income of $1.9 million; Q2 Adjusted EBITDAS of $15.1 Million
• Q2 Net Cash Provided by Operating Activities of $27.3 million

Maryville, Tennessee--(Newsfile Corp. - December 4, 2025) - Smith & Wesson Brands, Inc. (NASDAQ: SWBI), a U.S.-based leader in firearm manufacturing and design, today announced financial results for the second quarter of fiscal 2026, ended October 31, 2025.

Second Quarter Fiscal 2026 Financial Highlights

• Net sales were $124.7 million, a decrease of $5.0 million, or 3.9%, from the comparable quarter last year.
• Gross margin was 24.3% compared with 26.6% in the comparable quarter last year.
• GAAP net income was $1.9 million, or $0.04 per diluted share, compared with $4.5 million, or $0.10 per diluted share, for the comparable quarter last year.
• Non-GAAP net income was $2.0 million, or $0.04 per diluted share, compared with $5.2 million, or $0.12 per diluted share, for the comparable quarter last year. GAAP to non-GAAP adjustments for net income exclude costs related to the relocation and the grand opening of the Smith & Wesson Academy. For a detailed reconciliation, see the schedules that follow in this release.
• Non-GAAP Adjusted EBITDAS was $15.1 million, or 12.1% of net sales, compared with $19.1 million, or 15.0% of net sales, for the comparable quarter last year.
• Net cash provided by operating activities was $27.3 million, an increase of $34.7 million over the comparable quarter last year.

Mark Smith, President and Chief Executive Officer, commented, "We were pleased with our second quarter results, which continue to demonstrate the strength of the Smith & Wesson brand, the ongoing success of our innovation strategy, and our disciplined focus on managing operations and allocating capital. As we anticipated, excellent efficiency in our business operations allowed us to deliver solid profitability of $15 million of Adjusted EBITDAS on net sales of nearly $125 million. We also saw great results on our balance sheet, with a significant reduction in inventory thanks to our disciplined sales & operations planning process. This generated healthy operating cash flow of over $27 million in the quarter. Further, our new products continued to be a significant catalyst, accounting for 38.7% of sales in the quarter."

Deana McPherson, Executive Vice President and Chief Financial Officer, commented, "Distributor inventory in terms of actual units declined by over 5% from the end of the prior quarter and by 15% compared with the end of October 2024. This indicates continued positive sell through of our products at retail and a good position for us as we look forward to the coming months. Although we continue to see uncertainty regarding macro-economic conditions, including tariffs, we believe that the strength of our brand, product assortment, and new product offerings should allow us to continue performing well. Therefore, we expect our third quarter sales will be 8-10% over our Q3 fiscal 2025 sales with no significant impact, either positively or negatively, from channel inventory. Consistent with our capital allocation strategy, our board of directors has authorized a $0.13 per share quarterly dividend, which will be paid to stockholders of record on December 18, 2025 with payment to be made on January 2, 2026."

Conference Call and Webcast

The company will host a conference call and webcast on December 4, 2025 to discuss its second quarter fiscal 2026 financial and operational results. Speakers on the conference call will include Mark Smith, President and Chief Executive Officer, and Deana McPherson, Executive Vice President and Chief Financial Officer. The conference call may include forward-looking statements. The conference call and webcast will begin at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). Interested parties in North America are invited to participate by dialing 1-877-704-4453. Interested parties from outside North America are invited to participate by dialing 1-201-389-0920. Participants should dial in at least 10 minutes prior to the start of the call. The conference call audio webcast can also be accessed live on the company's website at www.smith-wesson.com, under the Investor Relations section.

Reconciliation of U.S. GAAP to Non-GAAP Financial Measures

In this press release, certain non-GAAP financial measures, including "non-GAAP net income," "Adjusted EBITDAS," and "free cash flow" are presented. From time-to-time, we consider and use these supplemental measures of operating performance in order to provide the reader with an improved understanding of underlying performance trends. We believe it is useful for us and the reader to review, as applicable, both (1) GAAP measures that include (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) an accrued legal settlement, (vi) Smith & Wesson Academy grand opening expenses, (vii) relocation expense, and (viii) the tax effect of non-GAAP adjustments; and (2) the non-GAAP measures that exclude such information. We present these non-GAAP measures because we consider them an important supplemental measure of our performance. Our definition of these adjusted financial measures may differ from similarly named measures used by others. We believe these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. These non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for our GAAP measures. The principal limitations of these measures are that they do not reflect our actual expenses and may thus have the effect of inflating our financial measures on a GAAP basis.

About Smith & Wesson Brands, Inc.

Smith & Wesson Brands, Inc. (NASDAQ: SWBI) is a U.S.-based leader in firearm manufacturing and design, delivering a broad portfolio of quality handgun, long gun, and suppressor products to the global consumer and professional markets under the iconic Smith & Wesson® and Gemtech® brands. Additionally, the company provides manufacturing services such as forging and machining to third parties and offers world-class firearm training programs to Law Enforcement/Military departments and civilians at the Smith & Wesson Academy™ in Maryville, TN. For more information call (844) 363-5386 or visit www.smith-wesson.com.

Safe Harbor Statement

Certain statements contained in this press release may be deemed to be forward-looking statements under federal securities laws, and we intend that such forward-looking statements be subject to the safe-harbor created thereby. Such forward-looking statements include, among others, that (i) distributor inventory trends indicate continued positive sell through of our products at retail and a good position for us as we look forward to the coming months; (ii) although we continue to see uncertainty regarding macro-economic conditions, including tariffs, we believe that the strength of our brand, product assortment, and new product offerings should allow us to continue performing well; and (iii) we expect our third quarter sales will be 8-10% over our Q3 fiscal 2025 sales with no significant impact, either positively or negatively, from channel inventory. We caution that these statements are qualified by important risks, uncertainties, and other factors that could cause actual results to differ materially from those reflected by such forward-looking statements. Such factors include, among others, economic, social, political, legislative, and regulatory factors; the impact of tariffs; the potential for increased regulation of firearms and firearm-related products; actions of social activists that could have an adverse effect on our business; the impact of lawsuits; the demand for our products; the state of the U.S. economy in general and the firearm industry in particular; general economic conditions and consumer spending patterns; our competitive environment; the supply, availability, and costs of raw materials and components; our anticipated growth and growth opportunities; our strategies; our ability to maintain and enhance brand recognition and reputation; our ability to effectively manage and execute the relocation; our ability to introduce new products and the success of new products; the potential for cancellation of orders from our backlog; and other risks detailed from time to time in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended April 30, 2025.

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