Key Takeaways

Smith & Wesson Brands ( SWBI ) shares plunged nearly 20% Friday, a day after it warned that inflation was reducing firearm sales and lowered its guidance.

The gunmaker reported second-quarter fiscal 2025 adjusted net income of $4.8 million, or $0.11 per share, down from $6.5 million, or $0.14 per share, a year ago. Revenue rose 3.8% year-over-year to $129.7 million.

Chief Executive Officer (CEO) Mark Smith said the results "came in below our expectations as overall demand for firearms normalized late in the quarter," and that the main reason for that "continued to be inflation." Smith added that "the consumer cautiousness with discretionary spend that we observed in recent quarters was more pronounced during the second quarter than we anticipated."

Chief Financial Officer (CFO) Deana McPherson explained that based on "softer demand trends," Smith & Wesson was lowering its expectations for the second half of the year, "and for our third quarter, we expect our top line to be approximately 10-15% lower than fiscal 2024."

The news sent shares of Smith & Wesson into negative territory this year, sinking to their lowest level since early 2023.

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