Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Smith & Wesson Brands Crushes Q2 Estimates; New Dividend Declared

By Eric Volkman - Dec 3, 2020 at 9:16PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company attributes its leap in sales to a number of factors, including the coronavirus pandemic.

It's a fine time to be in the firearms business, going by Smith & Wesson Brands' ( SWBI -28.72% ) 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%.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Smith & Wesson Brands, Inc. Stock Quote
Smith & Wesson Brands, Inc.
$16.33 (-28.72%) $-6.58

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/06/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.