On September 19, 2023, our Board of Directors authorized the repurchase of up to $50.0 million of our common stock, subject to certain conditions, in the open market or in privately negotiated transactions through September 19, 2024, or the 2023 Authorization. During fiscal 2025, we purchased 1,531,763 shares of our common stock for $21.4 million under the 2023 Authorization. The 2023 Authorization expired on September 19, 2024. On September 5, 2024, our Board of Directors authorized the repurchase of up to $50.0 million of our common stock, subject to certain conditions, in the open market or in privately negotiated transactions from September 20, 2024 through September 20, 2025, or the 2024 Authorization. As of April 30, 2026, we had repurchased 312,310 shares of our common stock for $4.1 million under the 2024 Authorization. On September 15, 2025, our Board of Directors authorized the repurchase of up to $50.0 million of our common stock, subject to certain conditions, in the open market or in privately negotiated transactions from September 21, 2025 through September 21, 2026, or the 2025 Authorization. As of April 30, 2026, we had not repurchased any shares of our common stock under the 2025 Authorization.

During the year ended April 30, 2026, there were no common stock repurchases. During the year ended April 30, 2025, we repurchased a total of 1,844,073 shares of our common stock for $25.5 million.

During the year ended April 30, 2026, our Board of Directors authorized, and we executed, the retirement of 31,677,994 shares of our common stock held in treasury. Upon retirement, these shares were restored to the status of authorized and unissued. As a result, the accumulated cost associated with this stock was allocated to common stock, additional paid-in capital, and retained earnings.

We have two stock incentive plans: the 2013 Incentive Stock Plan and the 2022 Incentive Stock Plan, or, together, the Incentive Stock Plans, under which employees and non-employees may have been granted (in the case of the 2013 Incentive Stock Plan), or may be granted (in the case of the 2022 Incentive Stock Plan) stock options, restricted stock awards, restricted stock units, or RSUs, stock appreciation rights, bonus stock, and awards in lieu of obligations, performance awards, and dividend equivalents. No grants have been made under the 2013 Incentive Stock Plan since our stockholders approved the 2022 Incentive Stock Plan at our annual meeting of stockholders held in September 2022. All new grants are issued under the 2022 Incentive Stock Plan.

The 2022 Incentive Stock Plan authorizes the issuance of 1,000,000 shares, plus 4,312,247 shares that were reserved and remained available for grant and delivery under the 2013 Incentive Stock Plan as of September 12, 2022, the effective date of the 2022 Incentive Stock Plan. The 2022 Incentive Stock Plan permits the grant of options to acquire common stock, restricted stock awards, RSUs, stock appreciation rights, bonus stock and awards in lieu of obligations, performance awards, and dividend equivalents. Our Board of Directors, or a committee of our Board of Directors, administers the stock plans, selects recipients to whom awards are granted, and determines the grants to be awarded. Options granted under the stock plans are exercisable at a price determined by our Board of Directors or a committee of our Board of Directors at the time of grant, but in no event less than fair market value of our common stock on the effective date of the grant. Grants of options may be made to employees and directors without regard to any performance measures. All options issued pursuant to the stock plans are generally nontransferable and subject to forfeiture.

Unless terminated earlier by our Board of Directors, the 2022 Incentive Stock Plan will terminate at the earliest of (1) the tenth anniversary of the effective date of the 2022 Incentive Stock Plan, or (2) such time as no shares of common stock remain available for issuance under the plan and we have no further rights or obligations with respect

to outstanding awards under the plan. The date of grant of an award is deemed to be the effective date upon which our Board of Directors or a committee authorizes the granting of such award.

Except in specific circumstances, grants of stock options vest over a period of four years and are exercisable for a period of 10 years after vesting. The 2022 Incentive Stock Plan also permits the grant of stock options to non-employees, which our Board of Directors or a committee has authorized in the past. There were no outstanding and exercisable stock options in fiscal 2026, 2025, and 2024.

The following table summarizes stock compensation expense by line item for the fiscal years ended April 30, 2026, 2025, and 2024 (in thousands):


	For the Year Ended April 30,
	2026		2025		2024
Cost of sales	$	615	$	686	$	648
Research and development		340		625		77
Selling, marketing, and distribution		1,150		1,148		930
General and administrative		6,245		5,150		4,028
Total stock-based compensation	$	8,350	$	7,609	$	5,683

As of April 30, 2026, there were 4,424,315 shares available for grant under the 2022 Incentive Stock Plan. We use our unissued share pool for all shares issued for options, restricted stock awards, RSUs, performance share units, performance-based restricted stock units, or PSUs, and shares issued under our Employee Stock Purchase Plan, or ESPP.

We grant RSUs to employees and non-employee members of our Board of Directors. The awards are made at no cost to the recipient. An RSU represents the right to receive one share of our common stock and does not carry voting rights. Except in limited circumstances, RSUs also do not carry dividend rights. Except in specific circumstances, RSU grants to employees prior to fiscal 2026 vest over a period of four years and RSU grants to employees during fiscal 2026 vest over a period of three years with one-fourth and one-third, respectively, of the units vesting on each grant anniversary date. We amortize the aggregate fair value of our RSU grants to compensation expense over the vesting period.

We grant PSUs to our executive officers and, from time to time, certain management employees who are not executive officers. At the time of grant, we calculate the fair value of our PSUs using the Monte Carlo simulation. We incorporate the following variables into the valuation model:


	For the Year Ended April 30,
	2026			2025			2024
Grant date fair market value
Smith & Wesson Brands, Inc.	$	9.22		$	16.80		$	12.08
Russell 2000 Index	$	1,975.86		$	1,980.23		$	1,769.21
Volatility (a)
Smith & Wesson Brands, Inc.		44.70	%		50.91	%		58.46	%
Russell 2000 Index		23.56	%		22.98	%		27.08	%
Correlation coefficient (b)		0.3541			0.3904			0.3528
Risk-free interest rate (c)		3.66	%		4.73	%		3.81	%
Dividend yield		5.64	%		2.86	%		3.31	%

(a)

Expected volatility is calculated over the most recent period that represents the remaining term of the performance period as of the valuation date, or three years.

(b)

The correlation coefficient utilizes the same historical price data used to develop the volatility assumptions.

(c)

The risk-free interest rate is based on the yield of a zero-coupon U.S. Treasury bill, commensurate with the three-year performance period.

Our PSUs vest, and the fair value of such PSUs are recognized, over the corresponding three-year performance period. Depending on the grant date, PSUs have a maximum aggregate award equal to between 200% and 220%. In addition, there is a cap on the number of shares that can be earned under our PSUs, which is equal to six times the grant-date value of each award.

PSUs granted in fiscal 2024 have a maximum aggregate award equal to 200% of the target amount granted. Generally, the number of PSUs that may be earned under the fiscal 2024 grants depends upon the total stockholder return, or TSR, of our common stock compared with the TSR of the Russell 2000 Index, or RUT, over the three-year performance period. The relative performance of our common stock must equal or exceed the relative performance of the RUT for any of the PSUs subject to the awards to be earned and vest. The relative performance of our common stock must outperform the RUT by 5% in order for the target award to vest. The relative performance of our common stock must outperform the RUT by at least 10% in order for 200% of the PSUs subject to the awards (the maximum number of PSUs) being earned and vesting.

PSUs granted after fiscal 2024, have a maximum aggregate award equal to 220% of the target amount granted. The number of PSUs that may be earned under these grants depends upon the primary performance metric of our average annual Adjusted EBITDAS Growth percentage, subject to a modifier based on the TSR of our common stock compared with the TSR of the RUT over the three-year performance period. The number of PSUs that may be earned is subject to a threshold of 40% of the average annual Adjusted EBITDAS Growth percentage target and a maximum of 220% of the average annual Adjusted EBITDAS Growth percentage target.

In certain circumstances, the vested awards will be delivered on the first anniversary of the applicable vesting date. We have applied a discount to the grant date fair value when determining the amount of compensation expense to be recorded for these RSUs and PSUs.

During fiscal 2026, we granted 237,691 PSUs to certain of our executive officers. We also granted 603,336 service-based RSUs during fiscal 2026, including 273,374 RSUs to certain of our executive officers, 76,266 RSUs to our directors, and 253,696 RSUs to non-executive officer employees.

During fiscal 2026, we canceled 108,736 market-condition PSUs as a result of the failure to satisfy the performance metric. We canceled 64,463 service-based RSUs as a result of the service period condition not being met. We delivered 295,841 shares of common stock to current employees and directors under vested RSUs with a total market value of $3.8 million.

During fiscal 2025, we granted 142,878 PSUs to certain of our executive officers. We also granted 486,895 service-based RSUs during fiscal 2025, including 142,882 RSUs to certain of our executive officers, 54,666 RSUs to our directors, and 289,347 RSUs to non-executive officer employees.

During fiscal 2025, we canceled 63,469 market-condition PSUs as a result of the failure to satisfy the performance metric and 38,521 as a result of the service period condition not being met. We canceled 36,068 service-based RSUs as a result of the service period condition not being met. We delivered 218,831 shares of common stock to current employees and directors under vested RSUs with a total market value of $4.5 million.

During fiscal 2024, we granted 176,583 PSUs to certain of our executive officers. We also granted 357,357 service-based RSUs during fiscal 2024, including 117,724 RSUs to certain of our executive officers, 58,819 RSUs to our directors, and 180,814 RSUs to non-executive officer employees.

During fiscal 2024, we canceled 158,100 market-condition PSUs as a result of the failure to satisfy the performance metric. We canceled 24,385 service-based RSUs as a result of the service period condition not being met. We delivered 228,087 shares of common stock to current employees and directors under vested RSUs with a total market value of $2.7 million. In addition, in connection with a 2019 grant, which vested in fiscal 2023, we delivered 55,726 market-condition PSUs to certain of our executive officers and a former executive officer with a total market value of $664,000.

The grant date fair value of RSUs and PSUs that vested in fiscal 2026, 2025, and 2024 was $5.5 million, $3.8 million, and $3.3 million, respectively.

A summary of activity for unvested RSUs and PSUs for fiscal years 2026, 2025, and 2024 is as follows:


	For the Year Ended April 30,
	2026					2025					2024
				Weighted					Weighted						Weighted
	Total # of			Average		Total # of			Average		Total # of				Average
	Restricted			Grant Date		Restricted			Grant Date		Restricted				Grant Date
	Stock Units			Fair Value		Stock Units			Fair Value		Stock Units				Fair Value
RSUs and PSUs outstanding, beginning of period		1,204,133		$	14.21		1,000,347		$	13.45		932,705			$	13.14
Awarded		841,027			9.38		629,773			15.60		533,940				12.07
Released		(390,259	)		14.07		(287,929	)		13.18		(283,813	)	(a)		11.54
Forfeited		(173,199	)		13.22		(138,058	)		17.01		(182,485	)			10.83
RSUs and PSUs outstanding, end of period		1,481,702		$	11.62		1,204,133		$	14.21		1,000,347			$	13.45

(a)

Includes 55,726 PSUs that vested during fiscal 2023.

As of April 30, 2026, there was $4.6 million of unrecognized compensation cost related to unvested RSUs and PSUs. This cost is expected to be recognized over a weighted average remaining contractual term of 1.3 years.

On September 27, 2021, our stockholders approved our 2021 ESPP, which authorizes the sale of up to 3,000,000 shares of our common stock to employees. All options and rights to participate in our ESPP are nontransferable and subject to forfeiture in accordance with our ESPP guidelines. Our current ESPP will be implemented in a series of successive offering periods, each with a maximum duration of 12 months. If the fair market value, or FMV, per share of our common stock on any purchase date is less than the FMV per share on the start date of a 12-month offering period, then that offering period will automatically terminate, and a new 12-month offering period will begin on the next business day. Each offering period will begin on April 1 or October 1, as applicable, immediately following the end of the previous offering period. Payroll deductions will be on an after-tax basis, in an amount of not less than 1% and not more than 20% (or such greater percentage as the committee appointed to administer our ESPP may establish from time to time before the first day of an offering period) of a participant’s compensation on each payroll date. The option exercise price per share will equal 85% of the lower of the FMV on the first day of the offering period or the FMV on the exercise date. The maximum number of shares that a participant may purchase during any purchase period is 12,500 shares, or a total of $25,000 in shares, based on the FMV on the first day of the offering period. Our ESPP will remain in effect until the earliest of (a) the exercise date that participants become entitled to purchase a number of shares greater than the number of reserved shares available for purchase under our ESPP, (b) such date as is determined by our Board of Directors in its discretion, or (c) March 31, 2032. In the event of certain corporate transactions, each option outstanding under our ESPP will be assumed or an equivalent option will be substituted by the successor corporation or a parent or subsidiary of such successor corporation. During fiscal 2026 and 2025, 198,691 and 175,134 shares were purchased under the 2021 ESPP, respectively.

We measure the cost of employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. We calculate the fair value of our stock options issued to employees using the Black-Scholes model at the time the options were granted. That amount is then amortized over the vesting period of the option. With our ESPP, fair value is determined at the beginning of the purchase period and amortized over the term of each exercise period.

The following assumptions were used in valuing our ESPP purchases during the years ended April 30, 2026, 2025, and 2024:


	For the Year Ended April 30,
	2026			2025			2024
Risk-free interest rate		3.726	%		4.136	%		5.225	%
Expected term	6 months			6 months			6 months
Expected volatility		45.82	%		42.03	%		45.69	%
Dividend yield		4.61	%		4.97	%		3.27	%

We estimate expected volatility using historical volatility for the expected term. The fair value of each stock option or ESPP purchase was estimated on the date of the grant using the Black-Scholes option pricing model (using the risk-free interest rate, expected term, expected volatility, and dividend yield variables, as noted in the above table). The total stock-based compensation expense, including stock options, purchases under our ESPP, and RSU and PSU awards, was $8.4 million, $7.6 million, and $5.7 million, for fiscal years 2026, 2025, and 2024, respectively.