Smith & Wesson Holding
The 10-second takeaway
For the quarter ended Jan. 31 (Q3), Smith & Wesson Holding beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share increased significantly. GAAP earnings per share grew significantly.
Margins increased across the board.
Smith & Wesson Holding reported revenue of $136.2 million. The five analysts polled by S&P Capital IQ expected to see net sales of $133.7 million on the same basis. GAAP reported sales were 39% higher than the prior-year quarter's $98.1 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.26. The six earnings estimates compiled by S&P Capital IQ anticipated $0.23 per share. Non-GAAP EPS of $0.26 for Q3 were 225% higher than the prior-year quarter's $0.08 per share. (The prior-year quarter included -$0.01 per share in earnings from discontinued operations.) GAAP EPS of $0.22 for Q3 were 214% higher than the prior-year quarter's $0.07 per share. (The prior-year quarter included -$0.01 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 36.8%, 590 basis points better than the prior-year quarter. Operating margin was 20.6%, 970 basis points better than the prior-year quarter. Net margin was 10.7%, 620 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $156.5 million. On the bottom line, the average EPS estimate is $0.32.
Next year's average estimate for revenue is $563.1 million. The average EPS estimate is $1.09.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 940 members out of 1,009 rating the stock outperform, and 69 members rating it underperform. Among 231 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 218 give Smith & Wesson Holding a green thumbs-up, and 13 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Smith & Wesson Holding is outperform, with an average price target of $13.33.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.