Core Insights - AXIL Brands, Inc. is experiencing substantial revenue growth but is facing challenges related to rising costs and margin compression as it scales its operations [1][11] Fiscal 2024 Results - AXIL Brands reported earnings per share of 21 cents for fiscal 2024, up from 10 cents the previous year [2] - Year-over-year net sales grew by 17%, reaching $27.5 million compared to $23.5 million in the prior year, primarily driven by marketing initiatives in the hearing protection segment [2] Key Business Metrics - The company’s sales growth reflects effective strategic initiatives, particularly in expanding distribution and retail channels, despite rising costs compressing margins [3] - Gross profit increased to $20.2 million from $17.7 million, with a slight narrowing of gross margin to 73.4% from 75.3% due to expansion costs [4] Profitability and Income - AXIL Brands achieved a net income of $2 million, up from $1.8 million a year earlier, with net income available to common shareholders increasing to $3.3 million due to a gain on the redemption of preferred shares [4] - Operating income was $1.5 million, down from $2 million in the prior year, with a net profit margin of 7.3%, slightly lower than the previous year's 7.8% [5] Cost Analysis - The cost of sales rose by 26% to $7.3 million from $5.8 million, driven by increased branding and marketing expenses [6] - Operating expenses increased by 19% year-over-year to $18.7 million, reflecting higher marketing, selling expenses, and general administrative costs [6] Cash Flow and Financial Position - Net cash provided by operating activities decreased to $2,677 from $2.9 million in the prior year, indicating strain on cash flow [7] - Cash reserves fell to $3.25 million from $4.83 million, reflecting ongoing investments and preferred stock repurchases [7] Liabilities and Financial Discipline - Total liabilities slightly decreased to $3.28 million from $3.5 million, indicating some financial discipline amid rising expenses [8] Management Strategy - Management is focused on expanding global presence and strategic partnerships, aiming for sustainable growth in dynamic markets [9] Shareholder Developments - The weighted average outstanding shares on a fully diluted basis dropped by 49% to 8.3 million shares, primarily due to the redemption of preferred shares [10]
AXIL Brands (AXIL) Earnings & Sales Increase Y/Y in FY24