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Robust Unit Shipments to Aid Smith & Wesson's (SWBI) Q1 Earnings

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·2 min read
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Smith & Wesson Brands, Inc. SWBI is likely to register top and bottom-line improvement, when it reports first-quarter 2022 results on Sep 1, backed by benefit from sporting goods shipment and increase in handguns revenues. The company might also witness margin improvement in the quarter to be reported.

Gross Margin Likely to Improve

In fourth-quarter fiscal 2021, the company’s gross margin came in at 45.1%, up roughly 1,300 basis points year over year. The momentum is likely to have continued in first-quarter fiscal 2022, owing to increased unit shipments, lower promotional activity, and price increase and mix shift toward higher-margin products. The company has been benefiting from robust demand for M&P Shield EZ small, concealable pistol.

The company has been gaining from new products launch. On its fourth-quarter fiscal 2021 call, it announced that it will launch 12 unique brand-new products in the upcoming year.

However, increased volume-related spending, inflation, higher depreciation on machinery purchases, and compensation-related costs to increased headcount and profitability might have impacted margins slightly.

Smith & Wesson Brands, Inc. Price and EPS Surprise

Smith & Wesson Brands, Inc. Price and EPS Surprise
Smith & Wesson Brands, Inc. Price and EPS Surprise

Smith & Wesson Brands, Inc. price-eps-surprise | Smith & Wesson Brands, Inc. Quote

Overall Q1 Expectations

The Zacks Consensus Estimate for first-quarter earnings is pegged at $1.26, compared with 97 cents in the prior-year quarter. The consensus mark for revenues stands at $296.2 million, suggesting growth of 6.6% from the year-ago quarter.

Smith & Wesson, which shares space with Sturm, Ruger & Company, Inc. RGR, carries a Zacks Rank #3 (Hold).

Key Picks

Some better-ranked stocks worth considering in the same space include Vista Outdoor Inc. VSTO and OneWater Marine Inc. ONEW. Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Vista Outdoor has reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 70.1%.

OneWater Marine has trailing four-quarter earnings surprise of 194.5%, on average.


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Sturm, Ruger & Company, Inc. (RGR) : Free Stock Analysis Report

Vista Outdoor Inc. (VSTO) : Free Stock Analysis Report

OneWater Marine Inc. (ONEW) : Free Stock Analysis Report

Smith & Wesson Brands, Inc. (SWBI) : Free Stock Analysis Report

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