AXIL Up 29.7% on Y/Y Earnings Rise in Q2 From Walmart, Retail Growth

Core Insights - AXIL Brands' shares increased by 29.7% following the release of its second-quarter fiscal 2026 results, driven by strong revenue growth, improved operating income, and enhanced profitability metrics supported by retail momentum [1] Financial Performance - For the quarter ending November 30, 2025, AXIL reported net sales of $8.1 million, a 5.2% increase from $7.7 million in the same quarter last year, primarily due to a significant order from a national retail chain [4] - Gross profit was $5.5 million, with a gross margin decline to 68.1% from 71.1%, attributed to a higher proportion of lower-margin wholesale and retail sales compared to direct-to-consumer sales [5] - Operating income rose by 34.2% year over year to $903,071, benefiting from operating leverage and reduced expense intensity [6] - Total operating expenses decreased to $4.6 million from $4.8 million, representing 57% of net sales compared to 62.4% in the prior year, driven by lower sales and marketing costs and reduced professional expenses [7] - Net income increased to $704,883 from $633,706 year over year, with basic EPS remaining flat at 10 cents and diluted EPS improving to 9 cents from 8 cents [7] - Adjusted EBITDA on a non-GAAP basis rose by 13.9% to $1.16 million, with the adjusted EBITDA margin expanding to 14.2% from 13.1% [8] Balance Sheet - AXIL ended the quarter with cash of $5 million, up from $4.8 million as of May 31, 2025, while accounts receivable increased to $2.4 million and inventory rose to $4.7 million, reflecting investments in working capital to support growth [9] Retail Strategy - The company is expanding its retail presence and direct-to-consumer platform, securing large national retail partnerships to enhance product visibility and drive volume growth [3] - AXIL announced the national distribution of its new X30i LT hearing protection product through Walmart, with an initial rollout in approximately 3,700 U.S. locations expected in early 2026 [11] - The company also launched the GS Extreme 3.0 tactical earbuds and expanded the Reviv3 brand through a partnership with Chatters, Canada's largest salon retailer [11]