Grab a Gun (PEW) Q3 2025: Gross Margin Expands 200bps as Mobile Orders Hit 67%
Grab a Gun’s third quarter showcased robust market share gains and a sharp margin expansion, outpacing industry volume declines and deepening customer loyalty. Strategic investments in mobile-first technology, marketing, and inventory discipline powered both top-line growth and improved profitability, despite headwinds from public company transition costs. Management signals continued focus on recurring revenue, digital channel leverage, and disciplined capital deployment heading into the holiday quarter.
Summary
- Margin Expansion Outpaces Industry Weakness: Strategic buying and mobile optimization drove a 200 basis point gross margin gain despite sector volume declines.
- Recurring Revenue and Loyalty Initiatives Advance: Subscription launch and rising repeat order rates signal higher customer lifetime value.
- Capital Discipline and Tech Investment Set the Stage: Share repurchases, M&A restraint, and tech upgrades position PEW for scalable growth.
Performance Analysis
Grab a Gun delivered strong Q3 revenue growth of 10% year-over-year to $22.3 million, notably outperforming the broader firearms industry, which saw a 5.3% decline in adjusted FBI NICS background checks. The company’s core firearm sales reached $18.1 million, with unit volumes up 16%, while non-firearm categories contributed $4.2 million. Gross profit margin rose to 11%, up 200bps YoY and 70bps sequentially, reflecting improved supplier terms, inventory optimization, and a product mix favoring higher-margin firearms.
Despite reporting a $4.2 million operating loss, driven by one-time stock-based compensation and legal costs related to its public listing, adjusted EBITDA was a modest $300,000 loss, indicating underlying operational health. Mobile orders continued their ascent, now representing 67% of total orders and 64% of revenue, up from 65% and 63% last year, respectively. Repeat purchase rates climbed to 55%, with customer lifetime value (LTV) improving across both new and existing cohorts, underscoring the platform’s stickiness.
- Mobile Channel Drives Efficiency: Mobile sessions grew 13% YoY, with higher conversion rates and revenue share, supporting scalable growth without proportional cost increases.
- Customer Quality Compounds: Average order value rose 7.7% and new customer LTV jumped 8.4% to $551, reflecting improved engagement and product mix.
- Balance Sheet Remains Robust: $109 million in cash, no debt, and $8.9 million in share repurchases signal financial flexibility for organic and inorganic growth.
Strategic inventory buildup ahead of the holiday season, with a focus on higher-margin SKUs, positions PEW to capture seasonal demand spikes while maintaining cost discipline. The company’s operational leverage is expected to improve as public company costs normalize and team investments yield top-line growth.
Executive Commentary
"Our third quarter strengths reflect the power of a platform that keeps earning customer trust. Foremost is largely driven by growth in our customer base, higher order volumes, and a favorable product mix shift towards firearms. Repeat purchase momentum remains strong, with repeat sales up 8.1% year over year, and the repeat rate improved by 47 basis points to 55%."
Mark Namati, Chief Executive Officer
"Our gross profit margin was 11%, a 200 basis point increase compared with 9% gross profit margin in the prior year quarter, and approximately a 70 basis point increase from the second quarter of this year, reflecting the benefits of strategic purchasing, strengthened supplier relationships, and ongoing operational efficiencies."
Justin Hilty, Chief Financial Officer
Strategic Positioning
1. Mobile-First Platform as Growth Engine
PEW’s technology stack is optimized for mobile conversion, enabling the company to scale digital engagement efficiently. With mobile now accounting for the majority of transactions and revenue, ongoing investments in frictionless, personalized mobile experiences are central to customer acquisition and retention.
2. Recurring Revenue and Customer Loyalty Initiatives
The launch of Shoot and Subscribe, an ammunition subscription service, marks a shift toward predictable, recurring revenue streams. Coupled with rising repeat purchase rates and improved customer LTV, PEW is methodically building a more stable and valuable revenue base.
3. Capital Allocation and M&A Discipline
Management is balancing organic investment with selective buybacks and a cautious M&A approach. The company repurchased $8.9 million in shares and maintains $11.1 million in remaining authorization. Leadership is clear that acquisitions will only proceed at rational valuations, favoring organic technology and team expansion when appropriate.
4. Advocacy and Brand Differentiation
PEW’s dual listing on NYSE Texas and the NYSE, along with its partnership with the Second Amendment Foundation, reinforces its identity as a mission-driven platform for firearm enthusiasts. This advocacy focus strengthens customer affinity and brand positioning in a politically sensitive category.
Key Considerations
Grab a Gun’s Q3 reflects a business outpacing its industry, leveraging digital scale and customer loyalty to drive margin and revenue gains. Investors should weigh the following:
Key Considerations:
- Industry Outperformance: PEW gained share in a contracting market, reflecting both platform strength and effective customer targeting.
- Operating Leverage Potential: As public company costs normalize and new hires ramp, PEW is positioned for improved margin leverage in 2026.
- Inventory and Seasonal Execution: Elevated inventory ahead of holiday demand is a calculated risk, but bulk buying and mix discipline should support margin preservation.
- Marketing Investment Ramp: The arrival of a new CMO and increased marketing spend are expected to accelerate customer growth, though ROI will need monitoring as spend scales.
Risks
Regulatory risk remains elevated, as any tightening of firearms laws or payment restrictions could materially impact demand and operations. The transition to public company status brings one-time and ongoing costs that may pressure short-term profitability. Inventory buildup ahead of the holidays carries demand risk if seasonal trends underperform. Competitive pressure from both legacy and digital-first retailers remains a persistent threat, especially if industry volumes continue to contract.
Forward Outlook
For Q4, Grab a Gun guided to:
- Mid to high single-digit year-over-year revenue growth
- Slight sequential improvement in gross margin
For full-year 2025, management maintained a disciplined outlook, emphasizing:
- Continued investment in technology and team to drive scale
- Healthy cash reserves to support growth and opportunistic capital deployment
Management highlighted several factors that could influence results:
- Holiday demand and promotional effectiveness will be key to Q4 performance
- Operating expenses will remain elevated as the company builds for scale, but are expected to moderate over time
Takeaways
PEW’s Q3 performance demonstrates strong execution on digital and customer-centric strategies, with margin and loyalty metrics trending positively even as the broader industry contracts.
- Margin and Share Gains: Strategic buying and mobile-first execution are driving outperformance in both revenue and profitability versus industry peers.
- Tech and Team Investments: The company is intentionally investing ahead of growth, building the foundation for future operating leverage and category leadership.
- Holiday and Subscription Levers: Investors should watch for evidence of recurring revenue traction and successful seasonal execution in Q4 and beyond.
Conclusion
Grab a Gun’s third quarter underscores the power of a focused, digital-first strategy in an industry facing structural headwinds. With strong brand positioning, robust balance sheet, and disciplined capital allocation, PEW is well placed to capture long-term value as it scales recurring revenue and deepens customer engagement.
Industry Read-Through
PEW’s margin expansion and digital channel gains highlight the growing divergence between tech-enabled firearm retailers and legacy players, particularly as industry volumes soften. The company’s success with mobile-first engagement, subscription models, and advocacy-driven branding offers a roadmap for other specialty retailers facing regulatory risk and shifting consumer demographics. As digital penetration rises and customer loyalty becomes more valuable, the ability to scale efficiently and invest in recurring revenue streams will increasingly separate winners from laggards across the broader sporting goods and specialty e-commerce sectors.