What: Shares of Smith & Wesson Holding Corp. (NASDAQ:AOBC) were up 11.9% as of 11:15 a.m. Tuesday after the firearms manufacturer increased guidance for its fiscal third-quarter and full fiscal-year 2016.

So what: Crediting stronger-than expected sell-through rates of products at distribution, Smith & Wesson has seen reduced distributor inventories of its firearms. In addition, adjusted December data from the National Instant Criminal Background Check System (NICS) showed "strong" year-over-year growth in consumer firearms purchases.

As a result, Smith & Wesson now expects fiscal third-quarter revenue in the range of $175 million to $180 million, which should translate to adjusted earnings per diluted share of $0.39 to $0.41. For perspective, Smith & Wesson's initial guidance last month called for Q3 revenue of $150 million to $155 million and adjusted earnings per share of $0.27 to $0.29. Analysts, on average, were modeling earnings of $0.28 per share on revenue near the high end of Smith & Wesson's previous range.

For the full fiscal-year 2016, Smith & Wesson anticipates revenue of $650 million to $660 million and adjusted earnings per diluted share of $1.36 to $1.41. Both ranges represent significant increases from previous guidance, which called for revenue of $625 million to $635 million and earnings per share of $1.26 to $1.31. Wall Street, for its part, was looking for adjusted earnings of $1.32 per share on revenue of $636.5 million.

Now what: On one hand, previous consensus estimates clearly show that Wall Street anticipated Smith & Wesson to outperform its old guidance, especially given a spark provided by consumers' fears of tougher gun legislation down the road. But the gravity of the outperformance reflected in Smith & Wesson's new ranges does come as a surprise. And it's particularly encouraging that the company is seeing such strength so early after its most recent quarterly report less than a month ago.

Of course, it remains to be seen just how long this elevated demand will last. But for now, I can't blame investors for so aggressively bidding up Smith & Wesson stock today.

Steve Symington has no position in any stocks mentioned. 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.