American Outdoor Brands, Inc. (AOUT) Q1 2026 Earnings Call Transcript

Net Sales Net sales in Q1 were $29.7 million compared to $41.6 million in Q1 last year, a decrease of 28.7%. The decline was attributed to traditional retailers accelerating about $10 million in orders into the prior quarter and lower e-commerce sales due to a large retailer adjusting purchasing patterns to realign with ongoing tariff impacts.

Traditional Channel Net Sales Traditional channel net sales decreased by 24.4% in the first quarter. Without the acceleration of retail orders into the prior year, traditional channel net sales would have increased 15%, indicating strong performance in this segment.

E-commerce Net Sales E-commerce net sales decreased 35.2% year-over-year in Q1. This decline was driven by a large e-commerce retailer adjusting its purchasing patterns to realign with ongoing tariff impacts.

Gross Margin Gross margin for Q1 was 46.7%, up 130 basis points compared to Q1 last year. This improvement was achieved through proactive supply chain management, strategic pricing adjustments, and introducing higher-margin products.

Operating Expenses GAAP operating expenses for Q1 were $20.7 million compared to $21.5 million last year, a decrease driven by lower variable costs from the decrease in net sales and lower intangible amortization.

EPS (GAAP) GAAP EPS for Q1 was a loss of $0.54 compared to a loss of $0.18 last year. The larger loss was mainly due to the decrease in net sales.

EPS (Non-GAAP) Non-GAAP EPS was negative $0.26 for Q1 compared to $0.06 in Q1 last year, reflecting the impact of lower net sales.

Adjusted EBITDA Adjusted EBITDA for Q1 was a loss of $3.1 million compared to a loss of $2 million in Q1 last year, driven mainly by the decrease in net sales.

International Net Sales International net sales decreased 58.2% or $2.6 million compared to Q1 last year. This was influenced by paused orders from Canada due to trade concerns, though the company remains optimistic about long-term growth in international markets.

Inventory Inventory increased by $21.1 million in Q1, driven by seasonal inventory build for hunting and holiday seasons, tariff-related costs, and strategic inventory reserves to support supply continuity.