Smith & Wesson Brands, Inc. (NASDAQ:SWBI), a leader in firearm manufacturing, has announced the appointment of KPMG LLP as its new independent registered public accounting firm, effective September 17, 2024. This change comes as part of a competitive auditor selection process conducted by the company's Audit Committee, which involved several notable accounting firms.
The decision to engage KPMG was based on a comprehensive evaluation of each firm's capabilities, responsiveness, and fee structures. Notably, this change does not reflect any dissatisfaction with services provided by the previous auditor, Deloitte & Touche LLP, which had served Smith & Wesson since 2014.
According to the company's recent SEC filing, the audit reports from Deloitte for the fiscal years ended April 30, 2024, and 2023 were free of any adverse opinions or disclaimers and did not contain any qualifications regarding uncertainty, audit scope, or accounting principles. Furthermore, there were no disagreements or reportable events between Smith & Wesson and Deloitte that would have impacted Deloitte's audit reports for those periods.
In addition to the auditor change, the company held its annual meeting of stockholders on September 17, 2024. During the meeting, stockholders elected directors to serve until the next annual meeting and provided a non-binding advisory vote on executive compensation, commonly referred to as "say-on-pay." The say-on-pay proposal was approved, while a stockholder proposal concerning a human rights impact assessment did not pass.
In other recent news, Smith & Wesson Brands Incorporated reported a challenging first quarter for fiscal 2025, with net sales falling below expectations and a reported net loss.
Despite this, the firearm manufacturer maintains its full-year outlook, expecting top and bottom line growth. New products, such as the Bodyguard 2.0 and the 1854 lever action rifle, have been launched, and the company anticipates increased demand in the upcoming season.
Smith & Wesson also announced a new $50 million share repurchase program, demonstrating confidence in its financial health. The company aims to achieve a debt-free balance sheet by the end of the fiscal year and generates at least $75 million in operating cash annually.
These are recent developments for Smith & Wesson. The company expects significant sales growth in Q2 and mid to high single-digit revenue growth for the full year. Gross margins improved in Q1 and are expected to continue improving, with a full-year target in the low 30s percentage range. However, operating expenses are projected to be higher in Q2, with an effective tax rate of around 25%.
Despite the slow start to fiscal 2025, Smith & Wesson's strategic responses position it well for the remainder of the year.
InvestingPro Insights
As Smith & Wesson Brands, Inc. (NASDAQ:SWBI) ushers in KPMG LLP as its new auditor, investors may find additional context in the company's financial performance and market standing through InvestingPro data. Smith & Wesson has a current market capitalization of 598.78 million USD, reflecting its position in the industry. The company's P/E ratio stands at 17.89, with an adjusted P/E ratio for the last twelve months as of Q1 2023 at 17.26. This valuation metric can be insightful for investors comparing Smith & Wesson's earnings relative to its share price against other companies.
Moreover, with a dividend yield of 3.85% as of the end of September 2024, Smith & Wesson demonstrates its commitment to returning value to shareholders, having increased its dividend for four consecutive years—an InvestingPro Tip that highlights the company's consistency in rewarding its investors. Additionally, InvestingPro Tips reveal that Smith & Wesson operates with a moderate level of debt and that its liquid assets exceed short-term obligations, providing a snapshot of the company's financial health and potential resilience in the face of market volatility.
For those seeking further analysis and insights, InvestingPro offers additional tips on Smith & Wesson, allowing investors to delve deeper into the company's performance and prospects. These tips are part of the comprehensive data and analytics available at InvestingPro, which includes detailed financial metrics and expert commentary for informed investment decisions.
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