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Why Smith & Wesson Stock Jumped Higher Friday

By Howard Smith - Jun 18, 2021 at 11:27AM

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Earnings from the firearms maker surpassed estimates, and the company is rewarding shareholders.

What happened

Firearms manufacturer Smith & Wesson Brands (SWBI -0.29%) reported earnings today, and the stock is bucking the overall market and moving higher. As of 11 a.m. EDT, Smith & Wesson shares were up 14%. 

So what

Smith & Wesson reported its fourth-quarter and full-year fiscal 2021 results today, noting that with full-year sales of $1.1 billion, the 169-year-old company surpassed the $1 billion annual revenue threshold for the first time. Investors liked the results and are also happy that the company announced a new $50 million share repurchase program and raised its $0.05 quarterly dividend by 60%. Smith & Wesson began paying a dividend for the first time in the past fiscal year. 

Arrow on fire shooting higher.

Image source: Getty Images.

Now what

Sales for the fiscal fourth-quarter ended April 30 soared over 67% versus the prior-year period, as sales in the U.S. firearms market continued the record growth seen throughout the past year. For the full fiscal year period, Smith & Wesson's sales doubled year over year. 

The company's top-line growth outpaced the overall industry. In its earnings conference call, Smith & Wesson president and CEO Mark Smith noted that the company gained market share as it increased full-year shipments by 70%, while the domestic firearms market grew by 42% in that time period. 

While sales and shipments significantly grew, Smith & Wesson also kept its costs under control. That helped to drive gross profit margin to 45.1%, a 1,300 basis point increase compared to the prior-year quarter. 

Investors are applauding the financial results, and hope it's the start of a longer runway of growth for the pure-play firearms maker. 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Smith & Wesson Brands, Inc. Stock Quote
Smith & Wesson Brands, Inc.
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