solo stove(DTC) - 2025 Q2 - Quarterly Results

Executive Summary & Business Update Key Strategic Highlights Solo Brands is transforming into a disciplined, profit-driven business, marked by successful debt refinancing, NYSE reinstatement, and a focus on cash generation - Successfully completed debt refinancing and removed the going concern disclaimer[2] - Class A common stock reinstated on NYSE under new ticker symbol SBDS[2] - Generated nearly $11 million in operating cash flow during Q2, highlighting a sharpened focus on cash generation and operational discipline[2] Consolidated Second Quarter 2025 Financial Highlights For Q2 2025, Solo Brands experienced a significant decline in net sales and an increased net loss, primarily due to headwinds in the Solo Stove segment Consolidated Second Quarter 2025 Financial Highlights | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------------- | :------ | :------ | :----- | | Net Sales | $92.3M | $131.6M | -29.9% | | Gross Profit | $56.6M (61.3%) | $82.6M (62.8%) | -150 bps | | Adjusted Gross Profit | $56.9M (61.7%) | $83.6M (63.6%) | -190 bps | | Operating Expenses | $66.4M | $80.4M | -17.4% | | Net Loss | $(20.8)M (22.5%) | $(4.0)M (3.1%) | Increased | | Adjusted Net Income | $1.0M | $6.0M | Declined | | Adjusted EBITDA | $10.5M (11.4%) | $15.5M (11.7%) | Declined | | Basic & Diluted EPS | $(8.93) | $(2.14) | Increased Loss | | Adjusted Basic & Diluted EPS | $0.02 | $1.59 | Declined | - The decline in net sales was primarily within the Solo Stove segment's direct-to-consumer (DTC) channel[5] - Operating expenses decreased by $14.0 million, driven by decreases in marketing spend and distribution costs within the Solo Stove segment, partially offset by $10.3 million in restructuring, contract termination, and impairment charges[5] Segment Second Quarter 2025 Performance Highlights In Q2 2025, Solo Stove faced significant declines in net sales and Segment EBITDA, while Chubbies delivered strong growth in both metrics - Solo Stove Segment: Net sales declined 45.8% to $38.3 million, driven primarily by declines in DTC sales due to prioritizing pricing integrity over significant promotional activity[5] - Solo Stove Segment: Segment EBITDA declined from $14.8 million (20.9% of net sales) in the prior year to $3.4 million (8.9% of net sales)[5] - Chubbies Segment: Net sales increased 13.1% to $44.5 million, driven by strong performance within the retail sales channel and sustained solid demand in DTC sales[5] - Chubbies Segment: Segment EBITDA improved from $7.7 million (19.7% of net sales) to $11.5 million (25.8% of net sales) due to growth in net sales and more efficient marketing spend[5] Consolidated Six Months Ended June 30, 2025 Financial Highlights For the first six months of 2025, Solo Brands experienced decreased net sales and a substantial increase in net loss, primarily due to Solo Stove's declines Consolidated Six Months Ended June 30, 2025 Financial Highlights | Metric | H1 2025 | H1 2024 | Change | | :-------------------------------- | :------ | :------ | :----- | | Net Sales | $169.5M | $216.9M | -21.8% | | Gross Profit | $99.2M (58.5%) | $133.2M (61.4%) | -290 bps | | Adjusted Gross Profit | $99.7M (58.8%) | $134.4M (62.0%) | -320 bps | | Operating Expenses | $119.7M | $137.3M | -12.8% | | Net Loss | $(39.3)M (23.2%) | $(10.5)M (4.9%) | Increased | | Adjusted Net Loss | $(5.2)M | $7.7M | Declined | | Adjusted EBITDA | $14.0M (8.3%) | $19.7M (9.1%) | Declined | | Basic & Diluted EPS | $(17.06) | $(4.48) | Increased Loss | | Adjusted Basic & Diluted EPS | $(3.15) | $2.81 | Declined | - Net sales decreased by $47.4 million, driven by declines in both retail and DTC sales within the Solo Stove segment, partially offset by strong sales results in retail and DTC for the Chubbies segment[5] - Operating expenses decreased by $17.6 million, primarily driven by a reduction in distribution and marketing expenses, offset in part by a $16.1 million expenditure related to restructuring, contract termination, and impairment charges[5] Segment Six Months Ended June 30, 2025 Performance Highlights For the first half of 2025, Solo Stove experienced a substantial decrease in net sales and Segment EBITDA, while Chubbies demonstrated strong growth in both metrics - Solo Stove Segment: Net sales decreased 47.3% to $64.4 million, driven primarily by declines in DTC sales due to prioritizing pricing integrity with retail partners over significant promotional activity[11] - Solo Stove Segment: Segment EBITDA declined from $22.4 million (18.4% of net sales) in the prior year to $1.9 million (3.0% of net sales)[11] - Chubbies Segment: Net sales increased 26.4% to $87.1 million, driven by strong performance within the retail sales channel and continued solid demand within the DTC sales channel[11] - Chubbies Segment: Segment EBITDA improved from $12.7 million (18.4% of net sales) to $22.8 million (26.1% of net sales) due to strong net sales growth and more efficient marketing spend[11] Balance Sheet & Liquidity Highlights Solo Brands improved its cash position and reduced inventory by June 30, 2025, successfully refinancing debt and eliminating going concern doubt Balance Sheet Highlights | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Cash and cash equivalents | $18.1M | $12.0M | +$6.1M | | Inventory | $84.1M | $108.6M | -$24.5M | | Outstanding Borrowings (Revolving Credit Facility) | $10.0M | N/A | N/A | | Outstanding Borrowings (Term Loan, net) | $241.2M | N/A | N/A | | Revolving Credit Facility Availability | $63.8M | N/A | N/A | - Cash and cash equivalents increased to $18.1 million as of June 30, 2025, from $12.0 million at December 31, 2024[6] - Inventory decreased to $84.1 million as of June 30, 2025, from $108.6 million at December 31, 2024, due to inventory reduction and supply chain optimization[6] - On June 13, 2025, the Company entered into a 2025 Refinancing Amendment, providing for a $240.0 million term loan and a $90.0 million revolving credit facility[8] - As a result of the refinancing, the substantial doubt about the Company's ability to continue as a going concern has been eliminated[8] Corporate & Market Updates Solo Brands announced the lifting of its Class A common stock trading suspension on the NYSE and a ticker symbol change to "SBDS" - The NYSE lifted the trading suspension of the Company's Class A common stock[12] - The ticker symbol for Class A common stock changed to "SBDS" from "DTC" effective July 24, 2025[12] Detailed Financial Performance Consolidated Statements of Operations and Comprehensive Income (Loss) The consolidated statements show a significant increase in net loss for both the three and six months ended June 30, 2025, driven by lower net sales and higher expenses Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) | (In thousands, except per share