Core Viewpoint - AXIL Brands, Inc. has demonstrated strong stock performance and financial growth in the second quarter of fiscal 2026, significantly outperforming the S&P 500 index, indicating robust short-term momentum and operational improvements [1]. Earnings & Sale Performance - For the quarter ended November 30, 2025, AXIL reported net sales of $8.1 million, a 5.2% increase from $7.7 million year-over-year, primarily driven by a significant order from a national membership-based retail chain [2]. - Net income rose to $704,883 from $633,706 in the same quarter last year, with basic EPS remaining at 10 cents and diluted EPS increasing to 9 cents from 8 cents [3]. Profitability Metrics - Gross profit was $5.5 million, but gross margin declined to 68.1% from 71.1% due to a shift towards a tighter-margin retail mix [3]. - Operating income increased by 34.2% to $903,071, supported by operating leverage and reduced operating costs, despite a 16.3% rise in cost of sales to $2.6 million [4]. Operating Expenses - Operating expenses decreased to $4.6 million from $4.8 million, falling to 57% of net sales from 62.4%, attributed to lower marketing spending and reduced professional costs [5]. Adjusted EBITDA - On a non-GAAP basis, Adjusted EBITDA rose by 13.9% to $1.16 million, with the Adjusted EBITDA margin improving to 14.2% from 13.1% [6]. Balance Sheet Metrics - Cash at quarter-end was $5 million, up from $4.8 million, while accounts receivable increased to $2.4 million from $1 million, and inventory rose to $4.7 million from $2.5 million, indicating a heavier build related to growth initiatives [7]. Management Commentary - The CEO described fiscal 2026 as a strong year, highlighting retail-channel expansion and improved expense discipline contributing to profitability [8]. Factors Influencing Performance - Revenue growth was supported by a large wholesale/retail order, which carried tighter margins than direct-to-consumer sales, impacting gross margin [9]. - The shift towards retail has improved operating efficiency, with marketing and selling costs declining [10]. Strategic Outlook - Management believes it can sustain profitable growth through operational cash flow, with strategic supply agreements expected to support revenue expansion in the first half of calendar 2026 [11]. Product Initiatives - The quarter included the national distribution of the new X30i LT with Walmart and the launch of GS Extreme 3.0, along with the expansion of the Reviv3 brand through a partnership with Chatters [12].

Core Insights - AXIL Brands, Inc. reported strong financial and operational results for the second quarter ended November 30, 2025, highlighting solid top-line growth and improved profitability metrics [1][4][6]. Financial Highlights - Net sales increased to $8.1 million, a 5.2% rise from $7.7 million in the prior year period [6]. - Gross profit was $5.5 million, representing 68.1% of sales, compared to 71.1% in the prior year [6]. - Operating expenses decreased to $4.6 million, or 57.0% of net sales, down from 62.4% in the prior year [6]. - Net income rose to $704,833, up from $633,706 in the prior year [6]. - Adjusted EBITDA was $1.2 million, a 13.9% increase from $1.0 million in the prior year [6]. Recent Business Highlights - The company is focused on retail channel expansion and enhancing its e-commerce model, with a national distribution agreement with Walmart set to introduce AXIL products to approximately 3,700 locations starting in early 2026 [5][8]. - The initial product rollout will feature next-generation in-ear hearing protection technology [6]. - AXIL launched GS Extreme 3.0 tactical earbuds and Reviv3 products through Chatters, Canada's largest salon retailer [6]. Operational Developments - Cash on hand as of November 30, 2025, was $5.0 million, an increase from $4.8 million as of May 31, 2025 [6]. - The company aims to sustain profitable growth through cash generated from operations while building lasting value for shareholders [8].