Why Smith & Wesson Shares Are Popping Today

Smith & Wesson Brands Inc SWBI shares are trading higher by around 9% as it reported above-consensus Q4 FY23 earnings results and increased quarterly dividends. 

The company reported a Q4 revenue decline of 20.1% Y/Y to $144.8 million, beating the consensus of $138.4 million. 

Gross margin contracted to 29.0% from 39.8% a year ago.

Adjusted EBITDAS declined to $30.3 million from $57.7 million a year ago.

Adjusted EPS of $0.32 beat the consensus of $0.27. 

Operating cash flow was $16.7 million in FY23 compared to $137.8 million in the prior year. 

As of April 30, 2023, cash and equivalents stood at $53.6 million.

Dividend: The company's board of directors raised the quarterly dividend per share by 20% to $0.12 to be paid on July 27, 2023, to the shareholder of record as on July 13, 2023.

Mark Smith, President and CEO stated, "Fiscal 2023 ended with a very solid fourth quarter as the headwinds we faced from elevated channel inventory throughout the first half of the fiscal year abated. Focused consumer promotions in the second half were successful in driving retail and distributor inventories down significantly and we are now at or below targeted levels with every major customer," said 

Deana McPherson, Executive Vice President and CFO said, "For fiscal 2024, we expect consumer demand to resemble demand in fiscal 2023; however, we anticipate an increase in our shipments given the significant decline in inventory in the distribution channel that we experienced during the first half of last fiscal year." 

Price Action: SWBI shares are up 8.19% at $12.16 premarket on the last check Friday.