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.