** Shares of firearms maker Smith & Wesson Brands SWBI.O down 7.7% post-market to $10.17, lowest since mid-Jan, after fiscal Q3 report shows reduced sales and gross margin

** Maryville, Tennesse-based co says net sales decreased ~16% y/y to $115.9 mln, and gross margin was 24.1% compared to 28.7% a yr-ago

** "While our new products continue to perform very well, we are seeing lower demand for our core product portfolio, which is negatively impacting both our top line and margins, CFO Deana McPherson said in the statement

** Co still expects annual rev to be 5%-10% lower than fiscal 2024, consistent with its guidance last qtr, McPherson added

** GAAP EPS in qtr of 4 cents down from 17 cents in comp period last year

** Avg estimates among 3 analysts called for rev of $119.5 mln and earnings of 3 cents, according to LSEG data

** SWBI shares on Thurs rose for third straight session and closed up 2% at $11.02

** On Tues, the U.S. Supreme Court signaled sympathy toward SWBI and distributor Interstate Arms to throw out the Mexican government's lawsuit accusing them of aiding illegal firearms trafficking to drug cartels and fueling gun violence

** YTD, stock up ~9% after 25% drop in 2024

** SWBI's report contrasts with peer Sturm, Ruger RGR.N, which two weeks ago posted rising rev and earnings, and boosted its dividend

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@tr.com 1-646-279-6380))