Smith & Wesson Brands (SWBI) risk factors, FY2026 10-K

Smith & Wesson Brands's FY2026 10-K, filed Jun 17, 2026, lists 40 risk factors in 8 groups. Against the prior year's 41: 1 new, 2 dropped, 10 substantially reworded.

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Risk factors listed
408 groups
New this year
1vs 41 last year
Dropped
2since the prior 10-K
Substantially reworded
10of those kept
Section length
12k wordsItem 1A

What the changes say

  • AI is newly identified as a risk to confidential information, intellectual property, decision-making, compliance, and competitiveness.
  • Relocation risk now emphasizes Tennessee incentive compliance through 2029, potential repayment, and operating-facility disruptions.
  • Customer concentration shifted: two customers represented 24.7% of fiscal 2026 sales and 30.2% of receivables, versus one customer previously.

What changed since the prior 10-K

New

  • NewRisks Relating to Certain Business Matters and Securities Markets

    Our use of artificial intelligence, or AI, may adversely impact our business

    Employee and company use of AI could expose confidential information, misuse intellectual property, produce biased or inaccurate results, or weaken competitiveness.

Dropped

  • DroppedRisks Relating to Economic, Political, Social, Legislative, Regulatory, and Inflationary Factors

    International, LLC case. Our liability insurance costs were $7.8 million, $8.4 million, and $7.8 million in fiscal 2025, 2024, and 2023, respectively

  • DroppedRisks Relating to Certain Business Matters and Securities Markets

    We are subject to risks related to corporate social responsibility

Reworded

  • 80% rewrittenRisks Relating to Certain Business Matters and Securities Markets

    We have identified material weaknesses in our internal control over financial reporting in the past and may identify material weaknesses in our internal control over financial reporting in the future that could result in material misstatements in our financial statements

    The company now reports a fiscal 2025 material weakness remediated in fiscal 2026, alongside the previously disclosed fiscal 2020 weakness remediated in fiscal 2021.

    Was: We have identified a material weakness in our internal control over financial reporting that may, if not remediated, result in material misstatements in our financial statements

  • 72% rewrittenRisks Relating to Economic, Political, Social, Legislative, Regulatory, and Inflationary Factors

    We are subject to risks associated with the Relocation

    The risk now specifies Tennessee incentive compliance dates through January 2029, possible award repayment, and facility disruptions, while dropping automation, turnover, and recruiting concerns.

  • 61% rewrittenRisks Relating to Intellectual Property, Information Systems, and Cybersecurity

    We may incur substantial expenses and devote significant resources in prosecuting others for their unauthorized use of our intellectual property rights

    No substantive change; the intellectual-property litigation, copying, foreign-protection, and competitor-patent risks remain the same.

  • 56% rewrittenRisks Relating to Economic, Political, Social, Legislative, Regulatory, and Inflationary Factors

    We are exposed to protectionist trade restrictions, including tariffs and potential trade laws

    The discussion drops the April 2025 tariff example and adds detailed risks to foreign sales, imports, supply chains, and production costs.

  • 51% rewrittenRisks Relating to Economic, Political, Social, Legislative, Regulatory, and Inflationary Factors

    Liability insurance coverage is expensive and may be difficult to obtain at commercially reasonable rates, or at all

    The wording changes from a number of carriers to certain carriers, with no substantive change to firearms-insurance availability and pricing risks.

  • 42% rewrittenRisks Relating to Economic, Political, Social, Legislative, Regulatory, and Inflationary Factors

    We may have difficulty collecting amounts owed to us

    Customer concentration increased from one customer at 14.6% of sales and 36.1% of receivables to two customers at 24.7% and 30.2%, respectively.

  • 34% rewrittenRisks Relating to Economic, Political, Social, Legislative, Regulatory, and Inflationary Factors

    We face risks associated with international activities

    The risk removes specific BIS licensing changes and high-risk-country export restrictions, leaving broader international compliance, trade, currency, and instability risks.

  • 33% rewrittenRisks Relating to Economic, Political, Social, Legislative, Regulatory, and Inflationary Factors

    Environmental Compliance

    No substantive change; environmental-law, contamination, compliance-cost, and governmental-proceeding risks remain materially the same.

  • 31% rewrittenRisks Relating to Certain Business Matters and Securities Markets

    We operate in a challenging market for talent and may fail to attract, motivate, train, and retain qualified personnel, including key personnel

  • 22% rewrittenRisks Relating to Economic, Political, Social, Legislative, Regulatory, and Inflationary Factors

    Poor product quality or performance, or defects in our products, could harm us

All 40 risk factors

Headings as the filing states them, in filing order.

Risks Relating to Economic, Political, Social, Legislative, Regulatory, and Inflationary Factors

  1. 01A variety of economic, political, social, legislative, regulatory, and inflationary factors could materially and adversely affect our business, operating results, and financial condition
  2. 02Environmental Compliance33% rewritten
  3. 03Employment and Occupational Health and Safety Compliance
  4. 04We face risks associated with international activities34% rewritten
  5. 05We are exposed to protectionist trade restrictions, including tariffs and potential trade laws56% rewritten
  6. 06High levels of inflation have adversely affected us and may continue to adversely affect us
  7. 07We must continue to introduce new products that are successful in the marketplace
  8. 08We are subject to risks associated with the Relocation72% rewritten
  9. 09We operate in only four facilities located in three locations, and our success depends on our ability to operate each facility efficiently
  10. 10A disruption in the activities of these facilities could adversely affect our firearm manufacturing operations
  11. 11labor shortages and disputes
  12. 12We rely on our supply chain for our production, and any interruptions in these arrangements could disrupt our ability to fill our customers’ orders
  13. 13We may be unable to forecast demand for our products accurately
  14. 14the domestic political environment, including debates over the regulation of various consumer products related to our industry
  15. 15We may fail to align our capacity with demand for our products
  16. 16Shortages of and price increases for components, parts, raw materials, and other supplies may delay or reduce our sales and increase our costs
  17. 17We believe that maintaining a high level of brand recognition and a strong reputation are critical to our success, particularly with respect to retaining existing customers and attracting new customers
  18. 18effectively manage marketing costs, including creative and media expenses, in order to maintain acceptable customer acquisition costs
  19. 19Poor product quality or performance, or defects in our products, could harm us22% rewritten
  20. 20We face intense competition
  21. 21We may be unsuccessful in making and integrating mergers, acquisitions, and investments, and completing divestitures
  22. 22We may have difficulty collecting amounts owed to us42% rewritten
  23. 23Liability insurance coverage is expensive and may be difficult to obtain at commercially reasonable rates, or at all51% rewritten

Risks Relating to Legal Proceedings, Product Recalls, and Other Product Liabilities

  1. 24We are subject to lawsuits and governmental investigations and inquiries
  2. 25Our business involves the potential for product recalls and product liability and other claims against us
  3. 26We produce or source and sell products that create exposure to potential product liability, warranty liability, and personal injury claims and litigation

Risks Relating to Intellectual Property, Information Systems, and Cybersecurity

  1. 27We may be unable to protect our intellectual property or obtain the right to use intellectual property from third parties
  2. 28We may incur substantial expenses and devote significant resources in prosecuting others for their unauthorized use of our intellectual property rights61% rewritten
  3. 29Interruptions in the proper functioning of our information systems or other issues with our ERP systems could disrupt our operations
  4. 30We are subject to cybersecurity risks, including risks related to customer, employee, vendor, and other company data

Risks Relating to Certain Business Matters and Securities Markets

  1. 31Our operating results may involve significant fluctuations
  2. 32changes in laws and regulations that may affect the marketability of our products
  3. 33The trading price of our common stock has fluctuated widely in the past and may fluctuate widely in the future
  4. 34factors relating to suppliers and competitors
  5. 35Actions of stockholder activists could cause us to incur substantial costs and divert management’s attention and our resources
  6. 36Our ability to operate our business efficiently may be adversely impacted if service providers and other businesses that permit firearm-related activities refuse to work with us
  7. 37We operate in a challenging market for talent and may fail to attract, motivate, train, and retain qualified personnel, including key personnel 31% rewritten
  8. 38Nevada law could make it more difficult for a third party to acquire us and discourage a takeover
  9. 39Our use of artificial intelligence, or AI, may adversely impact our businessNew
  10. 40We have identified material weaknesses in our internal control over financial reporting in the past and may identify material weaknesses in our internal control over financial reporting in the future that could result in material misstatements in our financial statements80% rewritten

Other Smith & Wesson Brands 10-Ks

  • FY2025 10-K risk factors
    41 risks

    High inflation depresses consumer demand, forcing firearm buyers to trade down or delay purchases. We face severe product liability claims, costly litigation, and potential refusals of service from financial and insurance institutions. Manufacturing operations depend heavily on just four facilities in three locations, exposing us to significant disruption risks.

    Filed Jun 20, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.