Financial Data and Key Metrics Changes - Net sales for Q2 were $57.2 million, a decrease of 5% compared to $60.2 million in Q2 last year [17] - Gross margin was 45.6%, down from 48% in Q2 last year, with actions taken to clear slow-moving inventory impacting margins [18][19] - GAAP EPS for Q2 was $0.16 compared to $0.24 last year, while non-GAAP EPS was $0.29 compared to $0.37 last year [19] Business Line Data and Key Metrics Changes - In the outdoor lifestyle category, net sales were $34.6 million, down 5% year-over-year, primarily due to a decrease in meat processing equipment [17] - The shooting sports category saw a 5.1% decline in net sales, driven by decreases in gun cleaning and personal protection products, partially offset by strong sales in the Caldwell brand [17] - Traditional channel net sales increased by 2.3%, while e-commerce net sales decreased by 15.9% compared to last year [18] Market Data and Key Metrics Changes - Domestic net sales, which accounted for approximately 95% of revenue, decreased by $2.4 million, or 4.3%, while international net sales decreased by roughly $600,000 compared to Q2 of last year [18] - Point-of-sale (POS) for November grew approximately 13%, indicating strong performance in the outdoor lifestyle category [13] Company Strategy and Development Direction - The company is focused on innovation and entering new outdoor product categories, which is driving the strength of its Growth Brands [5] - The innovation pipeline has generated nearly $100 million in incremental annual new product revenue over the past five years, with new products driving over 31% of net sales [10][12] - The company is committed to reducing inventory levels over time to improve working capital [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the performance in the second half of the year, despite caution regarding evolving consumer spending patterns and retail order volatility [14][26] - The company expects full fiscal year net sales to decline roughly 13%-14% year-over-year, but underlying net sales decline would be approximately 5% when adjusting for accelerated orders from the prior year [26] - Management believes that the full-year benefit of tariff mitigation actions will provide a clear path to improve profitability in fiscal 2027 [30] Other Important Information - The company ended the quarter with $3.1 million in cash and no debt, maintaining a strong balance sheet [20] - A new $10 million share repurchase program was approved, effective October 2025 through September 2026 [24] Q&A Session Summary Question: Visibility into revenue at POS and brand performance - Management indicated visibility into approximately 60% of revenue through POS, with outdoor lifestyle performing well and Caldwell brand significantly outperforming others [33][34] Question: Disconnect between November performance and quarterly guidance - Management noted that while POS is strong, retailers are managing lower inventory levels and adjusting orders based on available capital [35][37] Question: Mitigating softness in the e-commerce channel - Management highlighted the evolution of sales channels and the need to adapt to changes in consumer behavior and retailer strategies [39][40] Question: Seasonality and margin expectations - Management confirmed that Q2 and Q3 are typically the highest sales quarters, with expected gross margins in the range of 42%-43% for the full fiscal year [42][43] Question: Tariff mitigation and its impact on P&L - Management confirmed that tariff costs are capitalized in inventory and will start to amortize in December, with full mitigation expected by fiscal 2027 [51][52] Question: Insights on Black Friday performance - Management reported strong POS results during Black Friday and November, particularly in direct-to-consumer sales [62][63] Question: New product pipeline and market entry - Management expressed excitement about the innovation pipeline and plans to build on existing ecosystems within brands [66][68] Question: M&A landscape updates - Management noted a more favorable M&A environment with potential opportunities emerging, particularly among family-owned businesses [70]

Financial Data and Key Metrics Changes - Net sales for Q2 were $57.2 million, a decrease of 5% compared to $60.2 million in Q2 last year [16] - Gross margin was 45.6%, down from 48% in Q2 last year, primarily due to actions taken to clear slow-moving inventory [18] - GAAP EPS for Q2 was $0.16 compared to $0.24 last year, while non-GAAP EPS was $0.29 compared to $0.37 last year [18] Business Line Data and Key Metrics Changes - In the outdoor lifestyle category, net sales were $34.6 million, down 5% year-over-year, mainly due to a decrease in meat processing equipment [16] - The shooting sports category saw a 5.1% decline in net sales, driven by decreases in gun cleaning and personal protection products, partially offset by strong sales in the Caldwell brand [16] - Traditional channel net sales increased by 2.3%, while e-commerce net sales decreased by 15.9% compared to last year [17] Market Data and Key Metrics Changes - Domestic net sales, which accounted for approximately 95% of revenue, decreased by $2.4 million, or 4.3%, while international net sales decreased by roughly $600,000 compared to Q2 of last year [19] - The company noted that online-only customers now represent just 20%-25% of total net sales, indicating a shift in consumer purchasing behavior [8] Company Strategy and Development Direction - The company is focused on innovation and expanding into new outdoor product categories, which is driving the strength of its Growth Brands [5] - A major mass-market retailer is introducing Caldwell and BOG brands into thousands of stores, enhancing visibility and consumer engagement [10] - The company aims to reduce inventory levels over time to improve working capital, targeting a decrease to roughly $115 million by the end of the fiscal year [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of the year but remains cautious about the macro environment and evolving consumer spending patterns [13] - The company expects net sales for the full fiscal year to decline approximately 13%-14% year-over-year, but underlying net sales decline would be roughly just 5% when adjusting for accelerated orders from the prior year [25] - Management believes that the full year could deliver net sales that are down roughly 8% year-over-year in Q3, reflecting macro challenges and retailer dynamics [26] Other Important Information - The company ended the quarter with $3.1 million in cash and no debt, maintaining a strong balance sheet [19] - A new $10 million share repurchase program was approved, with approximately 74,000 shares repurchased at an average price of $8.76 per share [23] Q&A Session Summary Question: Visibility into revenue at POS and brand performance - Management indicated that they have visibility into about 60% of revenue through POS data, with outdoor lifestyle performing well and Caldwell brand significantly outperforming others [32] Question: Disconnect between November performance and Q3 guidance - Management explained that while POS is strong, retailers are managing lower inventory levels and adjusting their purchasing patterns based on available capital [34] Question: Mitigating softness in the e-commerce channel - Management noted that the evolution of consumer behavior and the growth of omnichannel sales are expected to reduce volatility in the e-commerce channel over time [36] Question: Seasonality and margin expectations - Management confirmed that Q2 and Q3 are typically the highest sales quarters, with expected gross margins in the range of 42%-43% for the full fiscal year [37] Question: Tariff mitigation and its impact on P&L - Management clarified that tariff costs are capitalized in inventory and will start to amortize in December, with mitigation efforts expected to offset tariff impacts by FY27 [39] Question: Insights on Black Friday performance - Management reported strong POS results during Black Friday and November, particularly in the direct-to-consumer segment [44] Question: New product pipeline and market entry - Management expressed excitement about the innovation pipeline, focusing on building ecosystems around existing brands and entering new markets [46] Question: M&A landscape updates - Management noted an increase in M&A opportunities, particularly among family-owned businesses looking to divest, and expressed optimism about potential larger assets surfacing in the near future [49]

Financial Data and Key Metrics Changes - Net sales in Q1 were $29.7 million, a decrease of 28.7% compared to $41.6 million in Q1 last year [14] - On a six-month basis, net sales for Q4 and Q1 combined increased by 4.2% compared to the same period last year [14] - Gross margin for Q1 was 46.7%, up 130 basis points compared to Q1 last year [17] - GAAP EPS for Q1 was a loss of $0.54 compared to a loss of $0.18 last year, while non-GAAP EPS was negative $0.26 compared to $0.06 in Q1 last year [18] Business Line Data and Key Metrics Changes - Traditional channel net sales decreased by 24.4% in Q1, while e-commerce net sales decreased by 35.2% compared to last year [14] - Net sales in shooting sports decreased by 25.1%, and outdoor lifestyle net sales decreased by 31.6% over Q1 last year [16] - Domestic net sales decreased by roughly 25%, while international net sales decreased by 58.2% or $2.6 million compared to Q1 last year [16] Market Data and Key Metrics Changes - Purchasing activity from retailers in Q1 reflected replenishment cycles that were turned on and off on a retailer-by-retailer basis [9] - E-commerce channel underperformed in Q1 due to lower order flow from a large e-commerce retailer adjusting its purchasing patterns [10] Company Strategy and Development Direction - The company emphasizes consumer-driven innovation and adapting to a shifting environment to strengthen brand equity and long-term growth [5][6] - An expanded partnership with Major League Fishing aims to enhance recurring subscription revenue and product introductions [11] - The company plans to introduce new products at the upcoming Shot Show in January, focusing on innovation to fuel growth [12] Management's Comments on Operating Environment and Future Outlook - The current environment is characterized by evolving tariff impacts and macroeconomic uncertainty, similar to FY2023 [6][22] - Management expects a year-over-year decline in net sales for Q2 of approximately 15% but remains optimistic about the overall year due to strong POS performance and new product launches [23][24] - The company is focused on maintaining gross margins and controlling costs while supporting long-term growth initiatives [24] Other Important Information - The company ended the quarter with $17.8 million in cash and no debt, maintaining a strong balance sheet [19] - Inventory increased by $21.1 million in the quarter, primarily for seasonal inventory build and tariff-related adjustments [20] Q&A Session Summary Question: Is there still excess tariff-related inventory at retail partners? - Management indicated that while some inventory was accelerated into the prior quarter, it would not be classified as excess [26] Question: How much pricing have you taken so far regarding tariffs? - Management discussed a multi-faceted approach to offset price increases, including supplier concessions and product redesigns, with ongoing adjustments expected throughout the year [27][28] Question: When do you expect order choppiness to settle down? - Management noted that retailers are ordering cautiously, and as inventory normalizes, they expect improved visibility moving forward [36][38] Question: Which brands are seeing the strongest POS? - Brands like Caldwell and BUBBA are performing well, with strong POS data indicating consumer demand [41] Question: What is the status of the M&A pipeline? - The company remains active in looking for acquisition targets but is finding fewer opportunities and is being patient in its approach [44][45] Question: Are consumers trading down to more value-oriented products? - Management observed that while some consumers may be trading down, the company's products continue to attract affluent consumers and enthusiasts [50][51]