Smith & Wesson Brands misses 1st quarter EPS and its earnings are beaten by

Smith & Wesson Brands (SWBI) reported first-quarter EPS of $0.11, $0.46 below analysts’ estimate of $0.57. Revenue for the quarter was $190.2 million versus consensus estimate of $167.68 million.

Mark Smith, President and Chief Executive Officer, said, “As expected, our first quarter results reflected a return to a normal demand pattern at the gun retail counter combined with temporary headwinds from to inventory corrections within the channel. Despite a difficult quarter from a revenue perspective, the team achieved impressive profitability, which significantly exceeded the pre-pandemic comparable quarter of fiscal 2020 – not only in relative percentages but in dollars. absolute. With a recovery in order rates over the past few weeks and a significant decline in unit inventory levels within the channel, we believe the inventory correction should now be largely in the rear view mirror. We continue to expect strong profitability for the remainder of the year, thanks to our disciplined approach to cost control and promotional spending.

Deana McPherson, Executive Vice President and Chief Financial Officer, said, “Our financial performance continues to reflect challenging year-over-year comparisons due to the return to more normalized demand levels following the surge. We are pleased with our gross margin, which was equal to our gross margin in the first quarter of fiscal 2020 despite the decline in sales and 1.5% better after adjusting for the relocation. Our balance sheet remains strong with $110.5 million in cash and no debt, and we expect to continue to generate strong cash In line with our capital allocation strategy, our Board of Directors has authorized a quarterly dividend of 0.10 $ per share, which will be paid to shareholders of record on September 22, 2022 and payment will be made on October 6, 2022.

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