Smith & Wesson Brands Inc (SWBI) 2025 Q4 法說會逐字稿

Good day, everyone, and welcome to Smith & Wesson Brands, Inc fourth quarter and full fiscal 2025 financial results conference call. This call is being recorded. At this time, I would like to turn the call over to Kevin Maxwell, Smith & Wesson's General Counsel, who will give us some information about today's call.

大家好，歡迎參加史密斯威森品牌公司 2025 財年第四季和全年財務業績電話會議。此通話正在錄音。現在，我想將電話轉給史密斯威森公司的總法律顧問凱文·麥克斯韋 (Kevin Maxwell)，他將向我們提供有關今天電話會議的一些資訊。

Thank you, and good afternoon. Our comments today may contain forward-looking statements. Our use of the words anticipate, project, estimate, expect, intend, believe and other similar expressions are intended to identify forward-looking statements. Forward-looking statements may also include statements on topics such as our product development, objectives, strategies, market share, demand, consumer preferences, inventory conditions for our products, growth opportunities and trends and industry conditions in general.

謝謝，下午好。我們今天的評論可能包含前瞻性陳述。我們使用預期、預期、估計、期望、打算、相信和其他類似的表達方式是為了識別前瞻性陳述。前瞻性陳述還可能包括有關我們的產品開發、目標、策略、市場份額、需求、消費者偏好、我們產品的庫存狀況、成長機會和趨勢以及整體行業狀況等主題的陳述。

Forward-looking statements represent our current judgment about the future and are subject to risks and uncertainties that could cause our actual results to differ materially from those expressed or implied by our statements today. These risks and uncertainties are described in our SEC filings, which are available on our website, along with a replay of today's call. We have no obligation to update forward-looking statements.

前瞻性陳述代表我們目前對未來的判斷，並受風險和不確定性的影響，這些風險和不確定性可能導致我們的實際結果與我們今天的陳述所表達或暗示的結果有重大差異。這些風險和不確定性在我們的證券交易委員會文件中有所描述，您可以在我們的網站上查閱這些文件以及今天電話會議的重播。我們沒有義務更新前瞻性陳述。

We reference certain non-GAAP financial results. Our non-GAAP financial results exclude relocation expense and other costs. Reconciliations of GAAP financial measures to non-GAAP financial measures can be found in our SEC filings and in today's earnings press release, each of which is available on our website. Also, when we reference EPS, we are always referencing fully diluted EPS and any reference to EBITDAS is to adjusted EBITDAS.

我們參考某些非公認會計準則財務結果。我們的非公認會計準則財務結果不包括搬遷費用和其他成本。您可以在我們向美國證券交易委員會 (SEC) 提交的文件和今天的收益新聞稿中找到 GAAP 財務指標與非 GAAP 財務指標的對帳表，這些文件和新聞稿均可在我們的網站上找到。此外，當我們引用 EPS 時，我們始終引用完全稀釋的 EPS，而對 EBITDAS 的任何引用均指調整後的 EBITDAS。

Before I hand the call over to our speakers, I would like to remind you that when we discuss NICS results, we are referring to adjusted NICS, a metric published by the National Shooting Sports Foundation based on FBI NICS data. Adjusted NICS removes those background checks conducted for purposes other than firearms purchases.

在我將電話交給我們的發言人之前，我想提醒您，當我們討論 NICS 結果時，我們指的是調整後的 NICS，這是國家射擊運動基金會根據 FBI NICS 數據發布的指標。調整後的 NICS 取消了那些為購買槍支以外的目的而進行的背景調查。

Adjusted NICS is generally considered the best available proxy for consumer firearm demand at the retail counter. Because we transfer firearms only to law enforcement agencies and federally licensed distributors and retailers, and not to end consumers, NICS generally does not directly correlate to our shipments or market share in any given time period - we believe mostly due to inventory levels in the channel.

調整後的 NICS 通常被認為是零售櫃檯消費者槍枝需求的最佳替代指標。由於我們僅將槍支轉移給執法機構和聯邦授權的分銷商和零售商，而不是最終消費者，因此 NICS 通常與我們在任何特定時間段內的出貨量或市場份額沒有直接關係 - 我們認為這主要是由於渠道中的庫存水平。

Joining us on today's call are Mark Smith, our President and CEO; and Deana McPherson, our CFO. With that, I will turn the call over to Mark.

參加今天電話會議的有我們的總裁兼執行長馬克史密斯 (Mark Smith) 和我們的財務長 Deana McPherson。說完這些，我會把電話轉給馬克。

Thank you, Kevin, and thanks, everyone, for joining us today. Fourth quarter proved more difficult than we anticipated, largely due to macroeconomic and industry trends. While the combination of lower sales and production volumes, along with mix factors, pressured margins, we were able to partially offset the bottom line impact through disciplined cost management by leveraging our flexible manufacturing model.

謝謝凱文，也謝謝大家今天加入我們。第四季比我們預期的要困難，主要是由於宏觀經濟和產業趨勢。雖然銷售量和產量下降以及混合因素對利潤率造成了壓力，但我們能夠利用靈活的製造模式，透過嚴格的成本管理來部分抵消對利潤的影響。

New products remain an area of strength, accounting for 44% of sales in the fourth quarter, and we will continue to lean into innovation as a point of competitive differentiation and to drive growth. Looking at market share for the fourth quarter, overall adjusted NICS was down 5.4%, with monthly year-over-year declines improving sequentially throughout the period compared to an 8.4% decline in our shipments into the channel.

新產品仍然是我們的優勢領域，佔第四季度銷售額的 44%，我們將繼續依靠創新作為競爭差異化的關鍵點並推動成長。從第四季的市佔率來看，整體調整後的 NICS 下降了 5.4%，與通路出貨量下降 8.4% 相比，整個期間的月度同比降幅有所改善。

On a category basis, similar to Q3, we believe we gained share in handguns as NICS was down 3.4% versus a 2.1% decline in our shipments into the sporting goods channel, driven by the strong performance of our innovative new products. In long guns, NICS was down 7.1% in Q4, while our shipments into the sporting goods channel declined 31.7% due to difficult comparisons; specifically, softness in the MSR market and our lever action offering benefiting from last year's tailwinds associated with its launch as a new product.

從類別來看，與第三季類似，我們認為我們在手槍領域的份額有所增加，因為 NICS 下降了 3.4%，而我們進入體育用品管道的出貨量下降了 2.1%，這得益於我們創新新產品的強勁表現。在長槍方面，NICS 在第四季度下降了 7.1%，而由於難以比較，我們在體育用品渠道的出貨量下降了 31.7%；具體來說，MSR 市場的疲軟以及我們的槓桿式產品受益於去年作為新產品推出的順風。

Average selling prices trended lower on a year-over-year basis, but were slightly higher sequentially, similar to what we experienced in Q3. Our overall ASPs in Q4 were down 4.5% versus a year ago and continued to reflect mixed dynamics with higher ASPs in long guns being offset by lower ASPs in handguns.

平均售價較去年同期呈下降趨勢，但較上季略有上升，與第三季的情況類似。我們第四季的整體平均銷售價格與去年同期相比下降了 4.5%，並且繼續反映出混合動態，長槍的較高平均銷售價格被手槍的較低平均銷售價格所抵消。

In long guns, our ASPs increased 11% driven by higher-priced models like our lever action rifles. In handguns, our ASPs declined 6.3%, reflecting mix shift related to strong demand for our lower-priced products. Even in a tough market environment, we expect that our iconic brands should enable us to maintain strong ASPs as we move through fiscal 2026.

在長槍方面，受槓桿式步槍等高價型號的推動，我們的平均銷售價格上漲了 11%。在手槍方面，我們的平均售價下降了 6.3%，這反映了對我們的低價產品的強勁需求所導致的產品組合變化。即使在艱難的市場環境下，我們預計我們的標誌性品牌也能幫助我們在 2026 財年保持強勁的平均售價。

Looking now at the overall firearms market, we continue to see consumers generally being cautious due to macroeconomic factors pressuring discretionary spending. While new product and lower price point offerings are still performing well, overall conditions suggest headwinds will likely persist in the near term. Despite these challenges, we remain well positioned to succeed in this environment. Demand for firearms appears to be “normal” for the summer based on feedback from our distributor and retail partners.

現在來看整個槍支市場，我們仍然看到消費者由於宏觀經濟因素對可自由支配支出施加壓力而普遍保持謹慎。儘管新產品和低價產品仍然表現良好，但總體情況表明，短期內逆風可能會持續存在。儘管面臨這些挑戰，我們仍然有能力在這種環境中取得成功。根據我們的分銷商和零售合作夥伴的反饋，夏季對槍支的需求似乎「正常」。

Importantly, while channel inventory fluctuations obviously affect our shorter-term out-the-door shipments, our channel checks and internal data indicate we have continued to maintain our market share leadership position at the retail counter. Promotional activity across the industry has been consistent with expectations, and we've continued to use targeted efforts effectively to drive activity and manage inventory.

重要的是，雖然通路庫存波動顯然會影響我們的短期出貨量，但我們的通路檢查和內部數據表明，我們繼續保持零售櫃檯的市場份額領先地位。整個行業的促銷活動與預期一致，我們繼續有效地利用有針對性的努力來推動活動和管理庫存。

Not surprisingly, inventory levels in the channel are being managed conservatively and while distributor inventory was up about 5,000 units during the quarter, this represented only about eight weeks of supply. It's also worth noting that we are starting to see indications of smaller firearm manufacturers exiting the market. We view this as reflective of rational market behavior and something we are accustomed to seeing in our industry during a down cycle - and we may benefit from this dynamic.

毫不奇怪，通路中的庫存水準受到保守管理，雖然本季分銷商庫存增加了約 5,000 台，但這僅相當於約八週的供應量。還值得注意的是，我們開始看到小型槍枝製造商退出市場的跡象。我們認為這反映了理性的市場行為，也是我們在產業下行週期中經常看到的現象——我們可能會從這種動態中受益。

I'm happy to report that our balance sheet remains strong, and we continue to be disciplined in managing our business and allocating capital to drive sustainable long-term value for stockholders. We are comfortable with internal inventory levels, which are very clean, and are proactively managing production schedules as needed. To that end, we are extending our normal summer shutdown by an extra week, which will help to better align inventory levels with demand as we enter the second quarter of fiscal 2026.

我很高興地報告，我們的資產負債表仍然強勁，我們繼續嚴格管理業務和配置資本，為股東創造可持續的長期價值。我們對內部庫存水準感到滿意，庫存非常乾淨，並且根據需要主動管理生產計劃。為此，我們將正常的夏季停工期延長一周，這將有助於我們在進入 2026 財年第二季時更好地平衡庫存水準和需求。

As always, during a cyclical downturn, we will remain focused on additional cost control initiatives and driving sales through delivery against our robust new product pipeline, with several exciting new products slated for introduction later in Q1 and throughout the remainder of the fiscal year. As the normal seasonal activity picks up in the fall as we approach the hunting season, cash flow should build and hold steady through the balance of the fiscal year.

與往常一樣，在週期性經濟衰退期間，我們將繼續專注於額外的成本控制舉措，並透過交付強大的新產品來推動銷售，我們計劃在第一季度晚些時候以及整個財政年度的剩餘時間內推出幾款令人興奮的新產品。隨著秋季狩獵季節的臨近，正常的季節性活動開始回升，現金流應該會在整個財政年度內不斷累積並保持穩定。

We will continue to invest in innovation to help us to maintain our market share leadership position. In addition, we will continue to prioritize debt reduction along with paying our quarterly dividend. We remain well positioned for long-term success with a leading brand, rich legacy, and strong balance sheet.

我們將繼續投資創新，以幫助我們保持市場份額領先地位。此外，我們將繼續優先減少債務並支付季度股息。憑藉領先的品牌、豐富的歷史傳承和強勁的資產負債表，我們仍處於有利地位，預計將取得長期成功。

Before I hand the call over, and as always, I just want to thank our entire team of talented Smith & Wesson employees for their tireless dedication in putting their skills to work each and every day to make us successful. With that, I'll turn the call over to Deana to cover the financials.

在交接電話之前，和往常一樣，我只想感謝我們整個才華橫溢的史密斯威森員工團隊，感謝他們每天不知疲倦地奉獻自己的技能，使我們取得成功。說完這些，我將把電話轉給迪安娜 (Deana) 來負責財務事宜。

Thanks, Mark. Net sales for our fourth quarter of $140.8 million were $18.4 million, or 11.6%, below the prior year comparable quarter, with new products making up 43.9% of total revenue for the quarter. We believe that firearm market conditions have been negatively impacted by persistent inflation, high interest rates and uncertainty caused by tariff concerns.

謝謝，馬克。我們第四季的淨銷售額為 1.408 億美元，比去年同期下降 1,840 萬美元，降幅為 11.6%，其中新產品佔本季總營收的 43.9%。我們認為，持續的通貨膨脹、高利率以及關稅問題造成的不確定性對槍支市場狀況產生了負面影響。

That being said, the success of our new products has enabled us to maintain a leadership position in the categories of the firearms market in which we compete. Gross margin of 28.8% was 6.7 percentage points below the prior year comparable quarter, reflecting lower overall production volume the impact of lower-priced, higher-volume products such as the BODYGUARD 380 and SD9, higher material content in certain of our newer long guns and increased promotions, partially offset by lower spending and lower inventory reserves.

話雖如此，我們新產品的成功使我們在所參與競爭的槍械市場中保持領先地位。毛利率為 28.8%，比去年同期低 6.7 個百分點，反映出總體產量較低、BODYGUARD 380 和 SD9 等低價高產量產品的影響、某些較新的長槍材料含量較高以及促銷活動增加，但支出減少和庫存儲備減少部分抵消了這些影響。

Operating expenses of $27.4 million for our fourth quarter were $2.1 million lower than the prior year comparable quarter due to reduced profit-related compensation costs, including profit sharing and lower insurance costs, partially offset by accrued severance and relocation related to the retirement and replacement of our Vice President of Sales and increased marketing costs related to the timing of industry shows and special promotions.

我們第四季的營運費用為 2,740 萬美元，比去年同期低 210 萬美元，原因是與利潤相關的薪酬成本減少（包括利潤分享和保險成本降低），但部分被與銷售副總裁退休和更換相關的應計遣散費和搬遷費以及與行業展會和特別促銷時間相關的營銷成本增加所抵消。

Net income of $8.6 million in the fourth quarter was $18.7 million less than the prior year comparable quarter due in part to a $6.5 million sale of intangible assets in the prior year. The remaining $12.2 million reduction in net income was due to a combination of lower net sales and gross margin, partially offset by reduced profit related compensation costs. GAAP earnings per share of $0.19 was below the prior year comparable quarter of $0.59 while non-GAAP earnings per share of $0.20 was also down from the $0.48 in Q4 fiscal 2024.

第四季淨收入為 860 萬美元，比去年同期減少 1,870 萬美元，部分原因是去年出售了 650 萬美元的無形資產。淨收入減少 1,220 萬美元是由於淨銷售額和毛利率下降造成的，但利潤相關薪酬成本的減少部分抵消了這一影響。每股 0.19 美元的 GAAP 收益低於去年同期的 0.59 美元，而非每股 0.20 美元的 GAAP 收益也低於 2024 財年第四季的 0.48 美元。

Turning to cash flows. During the quarter, we generated $40.8 million in cash from operations and spent $7.3 million on capital projects, resulting in net free cash of $33.5 million. We paid $5.7 million in dividends, repaid $30 million on our revolving line of credit, and ended the quarter with $25.2 million in cash and $80 million in borrowings on our line. At the end of fiscal 2025, we had $92.3 million of loan availability.

轉向現金流。本季度，我們從營運中產生了 4,080 萬美元的現金，並在資本項目上花費了 730 萬美元，產生了 3,350 萬美元的淨自由現金。我們支付了 570 萬美元的股息，償還了 3000 萬美元的循環信用額度，本季末我們擁有 2520 萬美元的現金和 8000 萬美元的借款。截至 2025 財政年度末，我們有 9,230 萬美元的貸款可用。

During our full fiscal year, we used $7.2 million in cash from operations and spent $21.6 million on capital projects, resulting in net free cash used of $28.8 million. The net cash usage was due primarily to a $29.3 million increase in inventory due to the softening of the market during the first half of our fiscal year.

在整個財政年度，我們使用了 720 萬美元的營運現金，並在資本項目上花費了 2,160 萬美元，導致淨自由現金使用量為 2,880 萬美元。淨現金使用量主要是由於本財年上半年市場疲軟導致庫存增加 2,930 萬美元。

Our Board has authorized our normal quarterly dividend of $0.13 to be paid to stockholders of record on July 7 with payment to be made on July 21. Looking forward to fiscal 2026. We currently expect demand for firearms in fiscal 2026 to be similar to what we saw in fiscal 2025, remaining subject to economic headwinds, such as inflation and the impact of tariff-related cost increases.

我們的董事會已批准向 7 月 7 日登記在冊的股東支付 0.13 美元的正常季度股息，支付日期為 7 月 21 日。展望2026財年。我們目前預計 2026 財年的槍枝需求將與 2025 財年類似，但仍將受到通貨膨脹和關稅相關成本上漲的影響等經濟逆風的影響。

Until such time as these issues begin to resolve, further speculation on full year results will not be discussed. With near-term demand remaining soft, we believe our first quarter could be approximately 10% lower than last year, with margins also lower due to promotions and increased costs due to tariffs on raw materials that are capacity constrained in the United States, such as steel.

在這些問題開始解決之前，不會討論對全年業績的進一步猜測。由於近期需求依然疲軟，我們認為第一季的銷售額可能比去年同期下降約 10%，利潤率也會因促銷活動而下降，並且由於美國對鋼鐵等原材料徵收關稅導致成本增加，而這些原材料的產能受到限制。

With regard to pricing and ASPs, we expect our first quarter to be sequentially lower in the 5% to 10% range, particularly impacting long guns due to mix, with handguns on the lower end due to promotions. We expect margins will remain under pressure due to low volume and cost increases, resulting in the loss of a few percentage points from last year. Operating expenses for the first quarter are expected to remain roughly flat to last year.

關於定價和平均售價，我們預計第一季的銷售額將環比下降 5% 至 10%，其中長槍因產品組合原因受到較大影響，手槍因促銷活動而價格較低。我們預計，由於銷售低迷和成本上漲，利潤率仍將面臨壓力，較去年同期下降幾個百分點。預計第一季的營運費用將與去年基本持平。

Finally, our effective tax rate is expected to be approximately 30%. With that, operator, can we please open the call to questions from our analysts.

最後，我們的有效稅率預計約為30%。接線員，請問我們可以開始回答我們分析師的問題嗎？

(Operator Instructions) Mark Smith, Lake Street Capital.

（操作員指示）馬克史密斯（Mark Smith），Lake Street Capital。

A handful of questions from me. First off, just dig in more on the industry, Mark, you've called out and you've been looking at some of the smaller competitors, and it looks like are going away here. I'm curious how much of a near-term headwind presents as maybe we see some inventory that goes out at low prices and then maybe longer-term opportunities from this?

我有幾個問題。首先，馬克，深入研究這個行業，你已經呼籲並一直在關註一些較小的競爭對手，看起來它們正在消失。我很好奇，短期內逆風會有多大，因為我們可能會看到一些庫存以低價出售，然後可能會由此帶來長期機會？

Yes. I think some of these smaller players that are going out, I don't see them. They were smaller players. I don't see a market influx of liquidation inventory into the channel that's going to have any really meaningful impact on us or any of the larger players that have been around. So I think we view that more as, frankly, for us as I think as you well know, we've been around 170 years. We're very used to the cyclical environment of the industry.

是的。我認為有些規模較小的公司正在退出，但我沒有看到他們。他們是身材較小的球員。我認為清算庫存湧入市場管道不會對我們或任何現有的大型參與者產生任何真正有意義的影響。所以我認為我們認為，坦白說，對我們來說，正如你們所知，我們已經存在了大約 170 年。我們非常習慣這個產業的周期性環境。

And for us, we view it as kind of a tailwind. Obviously, that's market share that's available and we're the market share leader. That's market share for us to take. So I don't think you think about it as there's going to be a flood of liquidated inventory coming in. Because again, I mean a lot of these guys are smaller players that, frankly, probably didn't have the capital to make that investment in big chunks of inventory.

對我們來說，我們將其視為一種順風。顯然，這是可用的市場份額，我們是市場份額的領導者。這就是我們要佔領的市場佔有率。因此，我認為你不會想到會有大量清算庫存湧入。因為，我的意思是，其中許多都是規模較小的參與者，坦白說，他們可能沒有足夠的資金來投資大量庫存。

Okay. And then just as we think about ASPs and pricing, if you can kind of frame that around the competitive market, what you're seeing from peers? And is there a -- do you feel like there's a need to take more maybe across the board cuts or discounting to maintain share given the current macro environment?

好的。然後，當我們考慮 ASP 和定價時，如果您可以圍繞競爭市場來建立它，您從同行那裡看到了什麼？並且，在當前的宏觀環境下，您是否認為有必要採取更多全面削減或折扣措施來維持份額？

Yes. We don't view -- we very much believe that our brand, as I kind of covered in the prepared remarks, our brand, we don't need to take pricing cuts. I mean we're still seeing some nice volume on our core line. I think as you well know, we -- a lot of our success in this year from a unit share growth and market share, taking market share has been due to new product. And I think that's an entry-level new product with the Bodyguard being extremely successful.

是的。我們不認為——我們非常相信我們的品牌，正如我在準備好的演講中提到的那樣，我們的品牌，我們不需要降價。我的意思是我們的核心產品線仍然有不錯的銷售。我想，正如你們所知，我們今年的成功很大程度上來自於單位份額的成長和市場份額的提升，而市場份額的提升則歸功於新產品。我認為這是一款入門級新產品，而 Bodyguard 則非常成功。

So we'll participate in that entry-level pricing category through new product introduction. We don't -- I don't think we have to be looking at discounting on our core line now. On our core line, there's a trend out there that there's more value provided through bundling, et cetera, is driving maybe that decision at the counter to do we buy brand X or brand Y. What else do I get with it?

因此，我們將透過新產品的推出來參與入門級定價類別。我們不會——我認為我們現在不必考慮對我們的核心產品線進行折扣。在我們的核心產品線上，存在著這樣一種趨勢，即透過捆綁銷售等方式可以提供更多價值，這也許會推動我們在櫃檯上做出購買 X 品牌還是 Y 品牌的決定。我還能得到什麼？

And we're definitely participating in that, and we'll continue to look for opportunities to increase the value that we're providing to that consumer when they purchase these firearm whether it be through promotions - we just ran a very successful promotion on an optic rebate, and we'll be looking for other opportunities, whether it's through promotions or just having it bundled in the box. And that allows us, Mark, to maintain those ASPs.

我們肯定會參與其中，我們將繼續尋找機會，在消費者購買這些槍支時增加我們為他們提供的價值，無論是通過促銷 - 我們剛剛在光學返利方面進行了非常成功的促銷，我們也會尋找其他機會，無論是通過促銷還是將其捆綁在盒子裡。馬克，這使我們能夠維護這些 ASP。

Okay. And then next question, just kind of similar. As we think about the demand being down and consumers kind of pulling back here with tariff and inflationary pressure, are you seeing this across the board? Or are you seeing it more so in lower-priced handguns? Is there anything to call out just in consumer behavior and where you've seen maybe a certain consumer really pull back more than others?

好的。下一個問題，有點類似。當我們考慮到需求下降以及由於關稅和通膨壓力而導致消費者減少時，您是否看到了普遍存在的這種情況？或者你在低價手槍中看到這種情況更多嗎？在消費者行為上有什麼需要注意的嗎？您是否發現某些消費者比其他消費者退縮得更厲害？

Yes. I think we're still seeing a little bit of that. I think it was actually you that kind of said that barbell where the two areas of the market there continuing to perform well as the very high end and the entry level. So I think as you can expect that consumer that's willing to pay the high end of the value on the pricing hierarchy is probably less impacted or is, say, that money and is going to spend it on a higher-end firearm.

是的。我認為我們仍然看到一些這樣的情況。我認為實際上您所說的槓鈴是指市場中的兩個領域，即高端和入門級，繼續表現良好。所以我認為，正如你所預料的那樣，願意支付高價的消費者可能受到的影響較小，或者說，他們願意花這筆錢購買更高端的槍支。

And so that purchase is still happening. And then -- but definitely in that -- the mid- to lower tier is definitely trending towards the lower tier. So again, that's something that we're been very successful with the Bodyguard, and we'll continue to look for some new products coming up here in the next quarter and throughout the rest of fiscal '26 that will take advantage of that.

因此購買仍在進行中。則 — — 但肯定的是 — — 中下層肯定趨向於較低層。所以，再說一次，我們在 Bodyguard 上取得了很大的成功，我們將繼續尋找在下個季度以及整個 26 財年剩餘時間內推出的一些新產品，以利用這一點。

Okay. And the last one for me, and I can jump back in the queue, is just as we think about an extra week of shutdown in the summer, is that all hitting in the July quarter? And if so, I assume that that fits into some of the guidance or some of the numbers that you talked about around July quarter?

好的。對我來說最後一個問題，我可以重新排隊，正如我們考慮夏季額外一周的停工一樣，這是否會對 7 月季度造成影響？如果是這樣，我認為這符合您在七月季度談到的一些指導或一些數字？

No, that will actually be an extension of the shutdown. I think as you know, our shutdown is -- our normally scheduled shutdown is the last week of July and the first week of August, which is one week in Q1 and one week in Q2, we'll actually be extending a second week in Q2. So it will be a second week in the second quarter. And just point out that this is something that we've done before. It's something that is kind of in the playbook for when we go through a cyclical downturn. And so just help us to more appropriately align inventories as we come into Q2.

不，這實際上是關閉的延長。我想，正如你所知，我們的停工時間通常是 7 月的最後一周和 8 月的第一周，也就是第一季度一周，第二季度一周，實際上我們將在第二季度延長第二週。所以這將是第二季的第二週。並指出這是我們以前做過的事情。這是我們經歷週期性衰退時的策略之一。因此，當我們進入第二季時，這有助於我們更適當地調整庫存。

(Operator Instructions) Steve Dyer, Craig-Hallum.

（操作員指示）史蒂夫戴爾、克雷格哈勒姆。

This is Matthew Raab on for Steve. Just want to touch on tariffs for a minute. It was -- you guys talked about it on the call a little bit earlier. Just walk through the exposure there, particularly for steel, as you called out. And then any other commodities that may be impactful? And if you're able to quantify the impact to gross margin, that would be great as well.

我是馬修‧拉布 (Matthew Raab)，代替史蒂夫報道。我只想稍微談談關稅問題。是的——你們剛才在電話裡談到了這一點。正如您所說，只需走過那裡的暴露區域，特別是鋼材。還有其他可能產生影響的商品嗎？如果您能夠量化對毛利率的影響，那就更好了。

Sure. Hey Matt. Yes, I mean the tariffs, obviously, it's a pretty volatile environment right now and not a whole lot of certainty on how that's all going to end up fleshing out. So we've dialed in everything that we know into the numbers and into some of the commentary and color that Deana gave - all that's dialed into that. So that's as much as we're going to provide at this point.

當然。嘿，馬特。是的，我指的是關稅，顯然，目前的環境相當不穩定，而且對於最終如何落實關稅也沒有太多的確定性。因此，我們將我們所知道的一切融入到數字中，以及迪安娜給出的一些評論和色彩中——所有這些都融入其中。這就是我們目前所能提供的全部內容。

I mean, the impact for us is going to be perhaps less pronounced than it will be for some of our competition. Just to remind everybody that we are 100% American made and a lot of our source even our supply chain is US based. That said, we do still have some exposure from foreign source on some of our components and some of our raw materials. So the impact to us could be, obviously, as everybody kind of comes back onshore, obviously, that drives up demand to the US suppliers, and there's a high likelihood it will also drive up pricing on US suppliers.

我的意思是，對我們的影響可能不如對我們的一些競爭對手那麼明顯。只是想提醒大家，我們的產品 100% 是美國製造的，我們許多產品的來源甚至供應鏈都在美國。儘管如此，我們的部分零件和原材料仍然受到來自國外的影響。因此，對我們的影響顯然是，隨著每個人都回到國內，這顯然會推高對美國供應商的需求，而且很有可能也會推高美國供應商的價格。

So I guess we're closely monitoring it day by day and watching the developments as they come, and we're continuing to look for opportunities to offset those, pass them through as we can. I mean obviously, it's a tough environment such as this. But we do know that from the competitive landscape, there's several major competitors who are going to be passing through some of those costs. And we'll continue to monitor that and look for opportunity to pass through. And then obviously, we're looking for cost control initiatives.

所以我想我們每天都在密切監視它並觀察其發展，並且我們正在繼續尋找機會來抵消這些影響，並盡可能地將其傳遞下去。我的意思是，顯然，這樣的環境很艱難。但我們確實知道，從競爭格局來看，有幾個主要競爭對手將會轉嫁部分成本。我們將繼續監控此事並尋找機會。顯然，我們正在尋找成本控制措施。

We have that state-of-the-art facility here in Tennessee that's up and running and very, very pleased with. And now we'll turn to making some investments back into our other facilities in Massachusetts and in Maine to look for further cost efficiencies there. So we'll continue to monitor it and do our best to offset, but it's kind of, as you know, and everybody is facing right now, it's kind of a volatile market, just monitor data by day.

我們在田納西州擁有最先進的設施，它已經投入運行，我們對此非常非常滿意。現在，我們將對位於馬薩諸塞州和緬因州的其他工廠進行一些投資，以尋求進一步提高成本效益。因此，我們會繼續監控並盡力抵消，但如你所知，現在每個人都面臨著一個動盪的市場，我們只是每天監控數據。

Yep. Okay. And then secondly, on inventory. How should we think about the cadence of inventory reduction through the year? You mentioned that you're comfortable with inventory levels where they're at. Is there any sort of targeted stocking level that you have in mind for year-end?

是的。好的。其次，關於庫存。我們該如何看待全年去庫存的節奏？您提到您對目前的庫存水準感到滿意。您對年底的庫存水準有什麼目標嗎？

Yes. I think you can expect that we'll have a significant inventory reduction throughout this year, as you saw in the financials, it was actually an inventory build in the fiscal year we just closed. This year, we're expecting a significant inventory reduction. And obviously, that will come with an AP reduction as well as you're looking at the balance sheet.

是的。我想你可以預期我們今年全年的庫存將大幅減少，正如你在財務報表中看到的那樣，這實際上是我們剛結束的財政年度的庫存增加。今年，我們預計庫存將大幅減少。顯然，正如您所看到的資產負債表，這也將伴隨 AP 的減少。

So Q1, though, is our usually, as we go through the summer, we talked about many times before, we level load our plant. So Q1 being always the -- in a normal year being the softest quarter, there will be an inventory build in Q1 and then it will come down throughout the balance of the fiscal year as we sell that off through the busy period and hunting season.

因此，Q1 通常情況下是這樣的，正如我們之前多次討論過的，當我們度過夏天時，我們會平衡工廠的負荷。因此，在正常年份中，第一季始終是最疲軟的季度，第一季將會增加庫存，然後在整個財政年度的剩餘時間裡，隨著我們在繁忙期和狩獵季節將這些庫存出售，庫存將下降。

(Operator Instructions) Mark Smith, Lake Street Capital.

（操作員指示）馬克史密斯（Mark Smith），Lake Street Capital。

Just one quick follow-up as we think about the balance sheet. In the past, you guys have talked about kind of debt repayment working through this year. I know you're not really giving guidance for the year, but any thoughts around kind of the balance sheet and ability to pay down debt through this year.

當我們考慮資產負債表時，只需快速跟進。過去，你們曾討論過今年的債務償還問題。我知道您實際上並沒有給出今年的指導，但您對今年的資產負債表和償還債務的能力有什麼想法嗎？

Yes. We will give a little color there. I think you can expect a very healthy cash generation in this year. As I just mentioned, we're going to be in an inventory reduction mode throughout the year. So that will be nice conversion back to cash, and then you should expect also a significant reduction in the debt balance that we'll be using that cash to pay back down that debt and obviously reduce that debt service cost.

是的。我們將在那裡添加一點顏色。我認為今年你可以期待非常健康的現金產生。正如我剛才提到的，我們全年都將處於減少庫存模式。因此，這將是很好地轉換為現金，然後你還應該預期債務餘額將大幅減少，我們將使用這些現金來償還債務，並大幅降低債務服務成本。

(Operator Instructions) And we have reached the end of the question-and-answer session. Therefore, I'll now turn the call back over to Mark Smith for closing remarks.

（操作員指示）問答環節已經結束。因此，我現在將電話轉回給馬克史密斯，請他做最後發言。

Thank you, operator, and thanks, everyone, for joining us today and your interest in Smith & Wesson. We look forward to speaking with everybody again next quarter.

謝謝接線員，也謝謝大家今天的參與以及對史密斯威森的關注。我們期待下個季度再次與大家交談。

Thank you. And ladies and gentlemen, this does conclude today's conference, and you may disconnect your lines at this time. We thank you for your participation. Have a great day.

謝謝。女士們、先生們，今天的會議到此結束，各位可以斷開連接了。我們感謝您的參與。祝你有美好的一天。