Financial Performance - FY25 net sales reached $222.3 million, an increase of 10.6% year-over-year[4] - FY25 gross margin was 44.6%, up 60 basis points from the previous year[4] - FY25 non-GAAP net income was $10.0 million, or $0.76 per diluted share, compared to $4.3 million, or $0.32 per diluted share, in the prior year[4] - FY25 Adjusted EBITDA was $17.7 million, representing 7.9% of net sales, up from $9.8 million, or 4.9% of net sales, in the prior year[5] - Q4 FY25 net sales were $61.9 million, an increase of 33.8% compared to $46.3 million in the same quarter last year[10] - Q4 FY25 non-GAAP net income was $1.7 million, or $0.13 per diluted share, compared to a non-GAAP net loss of $45,000 in the same quarter last year[10] Revenue Composition - The Outdoor Lifestyle category now represents 57% of total revenue, up from 40% in fiscal 2021[8] - Approximately $8 million to $10 million in orders were accelerated by retailers into Q4 FY25, originally planned for FY26[12] Balance Sheet and Cash Position - The company ended FY25 with a strong, debt-free balance sheet and $23.4 million in cash[11] - Total current assets increased to $171,590,000 as of April 30, 2025, compared to $155,374,000 a year earlier, reflecting a growth of 10.4%[21] - Cash and cash equivalents decreased to $23,423,000 from $29,698,000, a decline of 21.1% year-over-year[23] - Total liabilities increased to $68,745,000 as of April 30, 2025, up from $62,672,000 in 2024, marking an increase of 9.0%[21] - The total equity as of April 30, 2025, was $177,610,000, slightly down from $177,925,000 in 2024, indicating a decrease of 0.2%[21] Operating Results - Operating loss for the three months ended April 30, 2025, improved to $(953,000) from $(5,506,000) in the same period of 2024[21] - Non-GAAP net income for the year ended April 30, 2025, was $10,028,000, compared to $4,346,000 in 2024, representing a significant increase of 130.8%[24] - The company reported a net loss of $(77,000) for the year ended April 30, 2025, a substantial improvement from a net loss of $(12,248,000) in 2024[23] - For the three months ended April 30, 2025, the GAAP net loss was $989,000, compared to a loss of $5,302,000 for the same period in 2024[25] - For the years ended April 30, 2025, the GAAP net loss was $77,000, an improvement from a loss of $12,248,000 in 2024[25] Expenses and Adjustments - Research and development expenses for the year ended April 30, 2025, rose to $7,710,000, a 12.6% increase from $6,851,000 in 2024[21] - Total depreciation and amortization for the year ended April 30, 2025, was $13,179,000, down from $16,005,000 in 2024[25] - Stock compensation expenses for the year ended April 30, 2025, were $3,500,000, compared to $4,075,000 in 2024[25] - Emerging growth status transition costs amounted to $458,000 for the year ended April 30, 2025[25] - Non-recurring inventory reserve adjustments were $444,000 for the year ended April 30, 2025[25] Other Financial Metrics - Interest income for the three months ended April 30, 2025, was $44,000, down from $110,000 in 2024[25] - The company did not incur any technology implementation costs for the year ended April 30, 2025, compared to $465,000 in 2024[25] - The company has over 400 patents and patents pending, indicating a robust product pipeline[9]

Company Performance - American Outdoor Brands, Inc. (AOUT) reported quarterly earnings of $0.13 per share, exceeding the Zacks Consensus Estimate of a loss of $0.02 per share, and compared to break-even earnings per share a year ago, representing an earnings surprise of +750.00% [1] - The company posted revenues of $61.94 million for the quarter ended April 2025, surpassing the Zacks Consensus Estimate by 28.78%, and compared to year-ago revenues of $46.3 million [2] - Over the last four quarters, the company has consistently surpassed consensus EPS estimates and revenue estimates [2] Stock Performance - American Outdoor Brands shares have declined approximately 28.3% since the beginning of the year, while the S&P 500 has gained 3.6% [3] - The current status of estimate revisions translates into a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.02 on revenues of $45.6 million, and for the current fiscal year, it is $0.73 on revenues of $223 million [7] - The outlook for the industry, specifically the Leisure and Recreation Products sector, is currently in the bottom 42% of Zacks industries, which may impact the stock's performance [8]

Financial Data and Key Metrics Changes - The company achieved net sales of $222.3 million, an increase of 10.6% compared to fiscal 2024, driven by growth in every sales channel and category [22] - Gross margins increased by 60 basis points to 44.6%, primarily due to higher sales volumes, partially offset by increased tariff and freight costs [26] - Adjusted EBITDA for fiscal 2025 was $17.7 million, up 80.8% from fiscal 2024 [29] - GAAP EPS for fiscal 2025 was a loss of $0.01 compared to a loss of $0.94 in the prior year, while non-GAAP EPS was $0.76 compared to $0.32 in fiscal 2024 [28] Business Line Data and Key Metrics Changes - Outdoor lifestyle category net sales grew by 16.2%, driven mainly by sales in Bubba, Meet Your Maker, and BOG brands [24] - Shooting sports category net sales grew by 3.8%, primarily driven by sales in the Caldwell brand [24] - Direct-to-consumer net sales increased to $29.6 million from $29.1 million last year, representing a significant growth in DTC sales from roughly 3% to over 13% of total net sales [16][23] Market Data and Key Metrics Changes - Domestic net sales increased by almost 10%, while international net sales grew by 20% compared to fiscal 2024 [23] - E-commerce sales grew from 32% in fiscal 2020 to 38% in fiscal 2025, indicating a shift towards online sales channels [15] Company Strategy and Development Direction - The company aims to expand its reach into new categories, customers, and geographies, focusing on innovation and sustainable growth [6][7] - The strategic shift from a concentration in shooting sports to a broader outdoor lifestyle focus has seen outdoor lifestyle sales grow from 46% of net sales in FY 2020 to 57% today [15] - The company has secured 170 new patents, growing its patent portfolio by over 65%, indicating a strong commitment to innovation [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertainty in the macro environment and evolving tariff policies, which may impact consumer behavior [33] - Despite the challenges, management expressed confidence in the underlying demand for their products and the strength of their innovation pipeline [60] - The company is proactively mitigating potential risks through a disciplined, multi-pronged approach to manage the evolving tariff landscape [18][39] Other Important Information - The company is set to join the Russell 3000 Index and the small-cap Russell 2000 Index, enhancing visibility within the investment community [41] - The company ended the year with cash of $23.4 million and no debt, maintaining a strong balance sheet [29][31] Q&A Session Summary Question: Can you provide more color on the $8 million to $10 million of fiscal 2026 demand that was pulled into Q4? - Management indicated that retailers accelerated orders due to anticipated price increases from suppliers, benefiting the company [45] Question: What are the early Q1 trends for consumer discretionary spending? - Management noted strong point-of-sale trends, indicating healthy consumer demand despite some surface-level bumps related to inventory management [48][49] Question: What drove the strength in the traditional sales channel? - The strength was attributed to a combination of load-in related factors and the traditional channel's effectiveness in launching new products [50][51] Question: What is the current M&A environment and appetite for acquisitions? - Management expressed a clean balance sheet and readiness to pursue acquisitions, particularly in the outdoor lifestyle segment, with ongoing conversations for potential deals [53][54] Question: Can you clarify the reason for the withdrawn guidance? - Management explained that the acceleration of orders led to a slower start in Q1, creating uncertainty in order flow and prompting the decision to suspend guidance [59][60] Question: How much exposure does the company have to China in terms of cost of goods? - Management indicated that while there is exposure, they have built up inventory and are prepared to shift production to mitigate tariff impacts [70][72]

Financial Data and Key Metrics Changes - The company achieved net sales of $222.3 million, an increase of 10.6% compared to fiscal 2024, driven by growth in every sales channel and category [22] - Gross margins increased by 60 basis points to 44.6%, primarily due to higher sales volumes, partially offset by increased tariff and freight costs [26] - Non-GAAP EPS for fiscal 2025 was $0.76, compared to $0.32 in fiscal 2024, while GAAP EPS was a loss of $0.01 compared to a loss of $0.94 in the prior year [28] Business Line Data and Key Metrics Changes - Outdoor lifestyle category net sales grew by 16.2%, driven mainly by sales in Bubba, Meet Your Maker, and BOG brands [24] - Shooting sports category net sales grew by 3.8%, primarily driven by sales in the Caldwell brand [24] - Direct-to-consumer sales increased from $29.1 million to $29.6 million, representing a significant growth in DTC sales from roughly 3% to over 13% of total net sales [16][23] Market Data and Key Metrics Changes - Domestic net sales increased by almost 10%, while international net sales grew by 20% compared to fiscal 2024 [23] - E-commerce sales grew from 32% of net sales in FY 2020 to 38% in FY 2025, indicating a shift towards online sales channels [15] Company Strategy and Development Direction - The company aims to expand its reach into diverse markets and across multiple distribution channels, evolving from a focus on shooting sports to a broader outdoor lifestyle approach [14] - The company has secured 170 new patents, growing its patent portfolio by over 65%, indicating a strong commitment to innovation [16] - The company is actively exploring acquisition opportunities to bolster its outdoor lifestyle products, maintaining a clean balance sheet to facilitate potential deals [52] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertainty in the macro environment and evolving tariff policies, which may impact consumer behavior [33] - Despite the challenges, management expressed confidence in the underlying demand for their products and the strength of their innovation pipeline [32] - The company is suspending its previously issued net sales guidance for fiscal 2026 due to the pull-forward of orders and uncertainty in retail order flow [33][58] Other Important Information - The company is set to join the Russell 3000 Index and the small-cap Russell 2000 Index, enhancing visibility within the investment community [40] - The company ended the year with cash of $23.4 million and no debt, indicating a strong balance sheet [29] Q&A Session Summary Question: Can you provide more color on the $8 million to $10 million of fiscal 2026 demand that was pulled into Q4? - Management indicated that retailers accelerated orders due to anticipated price increases from suppliers, benefiting the company [44] Question: What are the early Q1 trends for consumer discretionary spend? - Management noted strong point-of-sale trends, indicating healthy consumer demand despite some surface-level bumps related to inventory management [47][48] Question: What drove the strength in the traditional sales channel? - The strength was attributed to traditional retailers effectively launching new products, while e-commerce relies more on social proof for purchasing decisions [49][50] Question: What is the current M&A environment and appetite for acquisitions? - Management expressed readiness to pursue acquisitions, particularly with companies struggling in the current environment, while maintaining a cautious approach [52][53] Question: Can you clarify the reason for the withdrawn guidance? - Management explained that the pull-forward of orders led to a slower start in Q1, creating uncertainty in retail order flow [58][59]

Financial Performance - Net sales for fiscal 2025 were $222.3 million, an increase of $21.2 million, or 10.6%, compared to fiscal 2024, primarily due to growth in the traditional channel [272]. - Gross profit for fiscal 2025 was $99.3 million, with a gross margin of 44.6%, an increase of 60 basis points from the prior fiscal year [271]. - The company reported a net loss of $77,000, or ($0.01) per diluted share, significantly improved from a net loss of $12.2 million, or ($0.94) per diluted share, in fiscal 2024 [290]. - Non-GAAP Adjusted EBITDA for fiscal 2025 was $17.7 million, up from $9.8 million in the previous fiscal year [272]. - Non-GAAP Adjusted EBITDA for fiscal year 2025 was $17.7 million, a 80.7% increase from $9.8 million in fiscal year 2024 [293]. Sales Channels - Traditional channel net sales increased by $21.1 million, or 18.1%, driven by higher sales of shooting accessories and outdoor lifestyle products [277]. - International net sales rose by $2.4 million, or 20.0%, primarily due to increased sales in Canada and European markets [277]. - New products accounted for 21.5% of net sales in fiscal 2025, down from 23.2% in fiscal 2024, with over 200 new SKUs introduced annually [278]. Operating Expenses and Cash Flow - Operating expenses decreased by $1.5 million, with research and development expenses increasing by 12.5% to $7.7 million [282]. - Cash generated from operating activities decreased to $1.4 million in fiscal 2025, down 94.5% from $24.5 million in the prior fiscal year [297]. - Total cash flow for fiscal 2025 was $(6.3) million, a decline of 181.0% compared to $7.7 million in fiscal 2024 [297]. - Cash equivalents on hand as of April 30, 2025, were $23.4 million, down from $29.7 million in 2024 [296]. - Cash used in investing activities was $3.9 million in fiscal 2025, a decrease of 34.8% from $6.0 million in fiscal 2024 [301]. - Cash used in financing activities was $3.7 million in fiscal 2025, significantly lower than $10.8 million in the prior fiscal year [302]. Inventory and Obligations - The company had an order backlog of $2.6 million as of April 30, 2025, which was $1.4 million lower than the previous year [279]. - The company expects inventory to increase in Q1 of fiscal 2026 due to purchases for new product launches and seasonal demand [300]. - Total contractual obligations as of April 30, 2025, amounted to $80.1 million, with $33.6 million due within one year [314]. Financial Resources and Risks - Interest income increased to $60,000 in fiscal 2025, compared to $39,000 in fiscal 2024, with no borrowings on the revolving line [286]. - The company has a $75.0 million credit facility available, with no borrowings outstanding as of April 30, 2025 [294]. - The company is assessing the impact of inflation on gross margins and operating expenses, which may affect future results [305].

Group 1 - The Zacks Rank system focuses on earnings estimates and revisions to identify winning stocks, while also considering trends in value, growth, and momentum [1][2] - Value investing is a preferred strategy for finding strong stocks, utilizing fundamental analysis to identify undervalued companies [2] - The Style Scores system allows investors to find stocks with specific traits, particularly in the "Value" category, where stocks with "A" grades and high Zacks Ranks are considered top value stocks [3] Group 2 - American Outdoor Brands (AOUT) has a Zacks Rank of 2 (Buy) and an A for Value, with a current P/E ratio of 15.38 compared to the industry average of 28.29 [4] - AOUT's P/S ratio is 0.68, which is lower than the industry's average P/S of 0.92, indicating potential undervaluation [5] - The P/CF ratio for AOUT is 15.33, significantly lower than the industry's average of 24.60, suggesting a strong cash outlook and further undervaluation [6][7]

Core Viewpoint - The Zacks Leisure and Recreation Products industry is facing challenges from the ongoing tariff war and soft macroeconomic data, but there is a positive trend in fitness product sales driven by increased health awareness, which is beneficial for the industry [1]. Industry Overview - The industry includes companies that provide a range of recreational products and services, such as amusement products, swimming pools, marine products, and outdoor equipment. The demand for these products is closely tied to economic growth, consumer spending, and disposable income [2]. Trends Impacting the Industry - **Tariff War**: The imposition of tariffs by the U.S. on key trade partners is creating uncertainty and concern among investors regarding its impact on the U.S. economy [3]. - **Consumer Sentiment**: A decline in consumer sentiment, with a reported score of 50.8 in April, the lowest since June 2022, is expected to negatively affect the industry due to inflation concerns [4]. - **Golf Industry Growth**: The golf sector is experiencing a boom, with rising demand for golf equipment driven by technological advancements and increased participation among younger demographics [5]. - **Fitness Product Demand**: There is robust demand for fitness-related products in the U.S., fueled by health awareness and lifestyle changes, leading to increased investment in home workout equipment and digital fitness platforms [6]. Industry Performance and Valuation - The Zacks Leisure and Recreation Products industry has a Zacks Industry Rank of 157, placing it in the bottom 36% of over 247 Zacks industries, indicating poor near-term prospects [7][8]. - The industry's earnings outlook has deteriorated, with a decrease of 18.6% in earnings estimates since December 31, 2024 [9]. - Over the past year, the industry has outperformed the S&P 500, growing 12.1% compared to the S&P 500's 8.1% increase [11]. - The industry trades at a forward price-to-earnings ratio of 26.36X, higher than the S&P 500's 19.85X and the sector's 18.45X [14]. Notable Companies in the Industry - **Sportradar Group AG (SRAD)**: The company is well-positioned due to its long-term sports data rights and partnerships, with expected earnings growth of 200% year-over-year in 2025 [17][18]. - **YETI Holdings, Inc. (YETI)**: YETI is experiencing growth in its international business, particularly in Europe and Australia, with a focus on both wholesale and direct-to-consumer channels [23][20]. - **American Outdoor Brands, Inc. (AOUT)**: The company is benefiting from a successful long-term strategy, achieving sales increases across various channels, with a projected earnings surge of 93.8% year-over-year in fiscal 2025 [24][25].

Economic Overview - Inflation unexpectedly declined in March for the first time in nearly five years, with the consumer price index (CPI) decreasing by 0.1% sequentially after a 0.2% increase in February, surpassing the consensus estimate of a 0.2% rise [3][4] - Year-over-year, CPI rose 2.4% in March, down from 2.8% in February, while core CPI increased by 0.1% sequentially, marking the smallest rise since June 2024 [4][7] - The decline in inflation was attributed to cheaper fuel and motor vehicles, with gasoline prices dropping by 6.3%, although food prices rose by 0.45% in March [4] Market Reaction - Following President Trump's announcement of a 90-day pause on tariffs, Wall Street experienced significant gains, with all three major indexes hitting record single-day increases [5][6] - The temporary halt in tariffs provided relief to investors after a previous loss of $6.4 trillion in four trading sessions due to the imposition of tariffs [6] Investment Opportunities - Given the positive market sentiment, investing in consumer discretionary stocks is recommended, with four highlighted stocks: American Outdoor Brands, Carnival Corporation, GameStop, and Netflix [2] - American Outdoor Brands (AOUT) has an expected earnings growth rate of 93.8% for the current year, with a Zacks Rank of 2 [9] - Carnival Corporation (CCL) is the largest cruise operator globally, with an expected earnings growth rate of 31% for the current year and a Zacks Rank of 2 [10] - GameStop (GME), the largest video game retailer, has an expected earnings growth rate of over 100% for next year, currently holding a Zacks Rank of 1 [12] - Netflix (NFLX), a pioneer in streaming, has an expected earnings growth rate of 24.1% for the current year, with a Zacks Rank of 2 [14]

Group 1 - The article emphasizes the importance of research-driven insights for retail investors [1] - It highlights the potential savings on subscription fees for premium investment content [1] - The author clarifies that there are no current stock positions or plans to initiate any within the next 72 hours [1] Group 2 - The article notes that past performance does not guarantee future results, indicating a cautionary approach to investment [2] - It states that no specific investment recommendations are provided, leaving the suitability of investments to individual discretion [2] - The authors of the articles are identified as third-party contributors, which may include both professional and individual investors [2]

Group 1 - The core investment strategy focuses on long-only investment, evaluating companies from an operational and buy-and-hold perspective, rather than market-driven dynamics [1] - The articles emphasize understanding the long-term earnings power of companies and the competitive dynamics within their industries [1] - The majority of recommendations will be holds, indicating a cautious approach to investment opportunities, with only a small fraction of companies deemed suitable for buying at any given time [1] Group 2 - The articles aim to provide important information for future investors and introduce a healthy skepticism towards a generally bullish market [1] - There is a clear distinction made between the author's opinions and professional investment advice, highlighting the need for readers to conduct their own due diligence [2][3]