American Outdoor Brands(AOUT) - 2026 Q1 - Quarterly Results

Executive Summary & Company Overview First Quarter Fiscal 2026 Financial Highlights American Outdoor Brands, Inc. reported a significant decline in net sales for Q1 FY2026, primarily due to accelerated retailer orders in the prior quarter. Despite this, gross margin improved, though the company recorded increased GAAP and non-GAAP net losses and a negative Adjusted EBITDA Financial Highlights | Metric | Q1 FY2026 (July 31, 2025) | Q1 FY2025 (July 31, 2024) | Change ($) | Change (%) | | :----------------------- | :------------------------ | :------------------------ | :--------- | :--------- | | Net Sales | $29.7 million | $41.6 million | $(11.9) million | (28.7)% | | Gross Margin | 46.7% | 45.4% | +1.3 pp | | | GAAP Net Loss | $(6.8) million | $(2.4) million | $(4.4) million | (183.3)% | | GAAP EPS (Diluted) | $(0.54) | $(0.18) | $(0.36) | (200.0)% | | Non-GAAP Net Loss | $(3.3) million | $0.7 million | $(4.0) million | (571.4)% | | Non-GAAP EPS (Diluted) | $(0.26) | $0.06 | $(0.32) | (533.3)% | | Non-GAAP Adjusted EBITDA | $(3.1) million | $2.0 million | $(5.1) million | (255.0)% | | Adjusted EBITDA % of Sales | (10.5)% | 4.8% | -15.3 pp | | About American Outdoor Brands, Inc. American Outdoor Brands, Inc. is an innovation company providing product solutions for outdoor enthusiasts across various categories, marketing a diverse portfolio of well-known brands - The company provides product solutions for outdoor enthusiasts in categories including hunting, fishing, camping, shooting, meat processing, outdoor cooking, and personal security/defense[9] - Key brands include BOG®, BUBBA®, Caldwell®, Crimson Trace®, Frankford Arsenal®, Grilla Grills®, Hooyman®, Imperial®, LaserLyte®, Lockdown®, MEAT! Your Maker®, Old Timer®, Schrade®, Tipton®, Uncle Henry®, ust®, and Wheeler®[9] Management Commentary & Business Update CEO's Strategic Review The CEO highlighted strong consumer resonance and point-of-sale performance, noting that new products contributed significantly to net sales. He also addressed the impact of accelerated retailer orders from the previous quarter on current net sales, emphasizing the effectiveness of their strategy despite the reported decline - Brands continue to resonate with consumers, fueling stronger point-of-sale performance versus peers across several strategic product categories[3] - New products represented nearly 29% of net sales during the first quarter[3] - Adjusting for approximately $10 million in accelerated retailer orders from Q1 FY2026 into Q4 FY2025, total first quarter net sales would have declined approximately 5%, with traditional channel net sales increasing by about 15%[3] CFO's Financial Review The CFO reiterated the impact of accelerated orders on net sales and emphasized the company's strong balance sheet, disciplined capital deployment through share repurchases, and debt-free status, providing flexibility for strategic objectives - Including approximately $10 million of net sales accelerated by retailers from Q1 FY2026 into Q4 FY2025, first-quarter fiscal 2026 net sales would have declined 4.7% compared with the prior-year period[5] Share Repurchase Activity | Activity | Q1 FY2026 (July 31, 2025) | | :---------------- | :------------------------ | | Shares Repurchased | ~240,000 shares | | Cost | $2.5 million | - The company ended the first quarter debt-free with $17.8 million in cash, providing a strong financial foundation for growth opportunities[5] Business Developments & Outlook The company announced an expanded partnership for its BUBBA brand with Major League Fishing, aiming to accelerate recurring subscription revenue. Management anticipates continued shifting market conditions and evolving consumer trends, committing to agility, innovation, and strengthening retail partnerships - Expanded partnership between the BUBBA brand and Major League Fishing (MLF) to integrate MLF SCORETRACKER® technology into the BUBBA app, launching SCORETRACKER LIVE in Spring 2026[5] - This innovation is expected to accelerate recurring subscription revenue and extend BUBBA's reach[5] - The near-term environment is expected to reflect shifting market conditions and evolving consumer trends, requiring agility and adaptability, with a continued focus on innovation, consumer proximity, retail partnerships, and disciplined execution[5] Detailed Financial Results Consolidated Statements of Operations For the three months ended July 31, 2025, the company reported a significant decrease in net sales and a higher net loss compared to the prior year, despite a slight improvement in gross profit margin Consolidated Statements of Operations (in millions) | Metric | Q1 FY2026 (July 31, 2025) | Q1 FY2025 (July 31, 2024) | | :---------------------- | :------------------------ | :------------------------ | | Net Sales | $29.702 million | $41.643 million | | Cost of Sales | $15.844 million | $22.717 million | | Gross Profit | $13.858 million | $18.926 million | | Operating Expenses | $20.677 million | $21.500 million | | Operating Loss | $(6.819) million | $(2.574) million | | Net Loss | $(6.829) million | $(2.365) million | | Basic and Diluted EPS | $(0.54) | $(0.18) | Consolidated Balance Sheets As of July 31, 2025, total assets slightly decreased, while total liabilities increased compared to April 30, 2025. The company maintained a strong cash position and managed inventory levels Consolidated Balance Sheets (in millions) | Balance Sheet Item | July 31, 2025 (Unaudited) | April 30, 2025 | | :------------------------ | :------------------------ | :------------- | | Total Assets | $241.911 million | $246.355 million | | Total Liabilities | $74.073 million | $68.745 million | | Total Equity | $167.838 million | $177.610 million | | Cash and Cash Equivalents | $17.771 million | $23.423 million | | Accounts Receivable, net | $21.754 million | $39.337 million | | Inventories | $125.787 million | $104.717 million | Consolidated Statements of Cash Flows For the three months ended July 31, 2025, the company experienced net cash outflows from operating, investing, and financing activities, resulting in a net decrease in cash and cash equivalents Consolidated Statements of Cash Flows (in millions) | Cash Flow Activity | Q1 FY2026 (July 31, 2025) | Q1 FY2025 (July 31, 2024) | | :------------------------------ | :------------------------ | :------------------------ | | Net Cash Used in Operating Activities | $(1.688) million | $(4.352) million | | Net Cash Used in Investing Activities | $(0.370) million | $(1.105) million | | Net Cash Used in Financing Activities | $(3.594) million | $(0.778) million | | Net Decrease in Cash and Cash Equivalents | $(5.652) million | $(6.235) million | | Cash and Cash Equivalents, End of Period | $17.771 million | $23.463 million | Non-GAAP Financial Measures Explanation of Non-GAAP Measures The company presents non-GAAP financial measures like "non-GAAP net loss" and "Adjusted EBITDA" to provide a clearer understanding of underlying performance trends by excluding certain items such as amortization of acquired intangibles, stock compensation, and non-recurring adjustments - Non-GAAP measures are used as supplemental indicators of operating performance to provide an improved understanding of underlying performance trends[7] - Adjustments to GAAP measures typically exclude amortization of acquired intangible assets, stock compensation, non-recurring inventory reserve adjustments, emerging growth status transition costs, and income tax adjustments[7] - These non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for GAAP measures, as they do not reflect actual expenses and may inflate financial measures on a GAAP basis[8] Reconciliation of GAAP to Non-GAAP Net Loss and EPS The reconciliation details the adjustments made to GAAP net loss and diluted EPS to arrive at the non-GAAP figures, primarily by adding back amortization of acquired intangible assets, stock compensation, and income tax adjustments Reconciliation of GAAP to Non-GAAP Net Loss and EPS (in millions, except EPS) | Metric | Q1 FY2026 (July 31, 2025) | Q1 FY2025 (July 31, 2024) | | :-------------------------------------- | :------------------------ | :------------------------ | | GAAP Net Loss | $(6.829) million | $(2.365) million | | Amortization of acquired intangible assets | $1.834 million | $2.119 million | | Stock compensation | $0.651 million | $0.932 million | | Non-recurring inventory reserve adjustment | — | $0.221 million | | Emerging growth status transition costs | — | $0.042 million | | Income tax adjustments | $1.039 million | $(0.201) million | | Non-GAAP Net (Loss)/Income | $(3.305) million | $0.748 million | | GAAP Net Loss per Share - Diluted | $(0.54) | $(0.18) | | Non-GAAP Net (Loss)/Income per Share - Diluted | $(0.26) | $0.06 | Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA The reconciliation from GAAP net loss to non-GAAP Adjusted EBITDA involves adding back interest income, income tax expense, depreciation and amortization, stock compensation, and non-recurring adjustments Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA (in millions) | Metric | Q1 FY2026 (July 31, 2025) | Q1 FY2025 (July 31, 2024) | | :-------------------------------------- | :------------------------ | :------------------------ | | GAAP Net Loss | $(6.829) million | $(2.365) million | | Interest income | $(0.007) million | $(0.148) million | | Income tax expense | $0.052 million | $0.022 million | | Depreciation and amortization | $3.017 million | $3.284 million | | Stock compensation | $0.651 million | $0.932 million | | Non-recurring inventory reserve adjustment | — | $0.221 million | | Emerging growth status transition costs | — | $0.042 million | | Non-GAAP Adjusted EBITDA | $(3.116) million | $1.988 million | Forward-Looking Statements & Investor Information Safe Harbor Statement The report includes a safe harbor statement for forward-looking statements, cautioning that actual results may differ materially due to various risks and uncertainties, including economic factors, supply chain disruptions, and market conditions - The press release contains forward-looking statements regarding future operating results, financial position, business strategy, and objectives[10] - These statements are qualified by important risks, uncertainties, and other factors that could cause actual results to differ materially, such as disruptions in material sourcing and manufacturing, economic and regulatory factors (e.g., tariffs), product recalls, inventory levels, and consumer spending[10][11] Conference Call and Webcast American Outdoor Brands, Inc. hosted a conference call and webcast on September 4, 2025, to discuss its first quarter fiscal 2026 financial and operational results, featuring the President and CEO, and CFO - A conference call and webcast were held on September 4, 2025, at 5:00 p.m. Eastern Time to discuss the Q1 FY2026 financial and operational results[6] - Participants included Brian Murphy (President and CEO) and Andrew Fulmer (CFO)[6] - Access was available via telephone at (833) 630-1956 or live webcast on the company's website (aob.com) under the Investor Relations section[6]