Smith & Wesson Brands Inc. (NASDAQ:SWBI) is one of the best gun stocks to buy in 2026. On March 5, Smith & Wesson Brands Inc. (NASDAQ:SWBI) shared its third-quarter FY2026 financial results, in which revenue reached $135.7 million. This was a 17.1% increase year over year and surpassed the consensus estimate of $112.8 million. CEO Mark Smith explained during the earnings call that the revenue growth came from a 28% surge in handgun shipments into the sporting goods channel and stronger average selling prices.
Quarterly adjusted earnings per share, or EPS, came in at $0.08 compared to $0.03 a year ago. It was also double the $0.04 that Wall Street was expecting. According to management, the EPS improvement stemmed from an expanded gross margin of 26.2%, up 210 basis points, due to higher production volume, lower promotion costs and lower Federal Excise Tax. This was partially offset by tariff impacts.
Management also detailed that operating cash flow improved significantly to $20.5 million, a $30.3 million year over year swing. This was primarily due to lower inventory, which decreased $7.9 million during the quarter versus a $2.9 million increase in Q3 FY2025, the company noted in the earnings release. The company also reduced its debt to $75 million by quarter-end and subsequently repaid an additional $20 million on its line of credit. So, the outstanding borrowing at the end of the quarter was down to $55 million, Smith, the CEO, said during the earnings call.
For Q4 FY2026, management guided net sales to increase 10%-12% over Q4 FY2025. They cited continued market share growth, strength of brand and product assortment. Management also expects new product offerings to drive growth in an otherwise stable market.
Smith & Wesson Brands Inc. (NASDAQ:SWBI) designs, manufactures, and sells firearms for consumer, law enforcement, and military markets. Its product portfolio includes handguns, rifles, and related accessories distributed through sporting goods stores, firearm dealers, and online channels.
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