Smith & Wesson Brands Crushes Q2 Estimates; New Dividend Declared

It’s a fine time to be in the firearms business, going by Smith & Wesson Brands(NASDAQ: SWBI) latest quarterly results. The company’s second quarter of fiscal 2021 set a new quarterly top-line record, and both revenue and profitability came in well above analyst expectations.

The results were published after market hours. For the quarter, Smith & Wesson’s net sales came in at $248.7 million. This figure was nearly 120% higher on a year-over-year basis. Non-GAAP (adjusted) net income was $52.8 million ($0.93 per share), up from the $472,000 the company earned in its fiscal Q2 2020.

A Smith & Wesson M2.0 Series pistol.

Image source: Smith & Wesson Brands.

On average, prognosticators tracking the stock were anticipating just under $223 million in net sales and $0.63 per share in adjusted net income.

Of the two key firearms categories, long guns enjoyed the more robust growth in sales. Take from this segment increased by 217% to just under $76 million. The larger handgun category saw growth of almost 98%, producing $161 million in revenue.

In a regulatory filing, Smith & Wesson wrote that the jumps were “due to heightened demand for all major product lines driven by an increased consumer interest in firearms, likely resulting from continued concerns regarding the COVID-19 pandemic, recent events that have raised fears about personal protection, [and] uncertainty regarding the possibility of increased firearm regulation in relation to the recent political election.”

It also said that curtailing discounts raised the average selling price of its goods.

Smith & Wesson also declared a $0.05 per share dividend, which will be handed out on Jan. 5 to stockholders of record as of Dec. 17. At the most recent closing share price, this would yield 1.3%.

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