Sign in
AO

American Outdoor Brands, Inc. (AOUT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 FY2025 delivered net sales of $60.2M (+4.0% y/y), GAAP EPS $0.24, non-GAAP EPS $0.37, gross margin 48.0% (+230 bps y/y), and Adjusted EBITDAS $7.5M (12.4% of sales), ahead of management’s expectations .
  • Broad-based growth across categories (Outdoor Lifestyle +5.4%, Shooting Sports +1.9%) and channels (Traditional +4.3%, E-commerce +3.5%; Domestic +3.4%, International +14.8%) with international net sales of $3.4M (~6% of sales) .
  • Guidance raised: FY25 net sales to $205–$210M, Adjusted EBITDAS to $13.5–$15.0M (6.6–7.1% of sales), and FY26 net sales outlook established at $220–$230M; Q3 FY25 gross margin guided ~45% with net sales growth ~5% .
  • Stock reaction catalysts: raised FY25 guidance and visibility into FY26 driven by robust new-product pipeline (e.g., Caldwell ClayCopter, BUBBA SFS Lite) and retailer commitments/early load-ins; active buyback (~$1.0M repurchased in Q2) and cash of $14.2M, no debt .

What Went Well and What Went Wrong

What Went Well

  • Innovation-led growth with in-line products driving the quarter; CEO: “Our second quarter results came in ahead of our expectations…” and “…growth…was driven entirely by in-line products” .
  • Category/channel breadth: Outdoor Lifestyle +5.4%; Shooting Sports +1.9%; all channels grew; international +14.8% and highest shipping month ever in October from Columbia facility .
  • Margin expansion: gross margin 48.0% (+230 bps y/y) on favorable inbound freight and timing vs last year; Adjusted EBITDAS +42.9% y/y to $7.5M .

What Went Wrong

  • Personal protection softness within Shooting Sports; growth offset by accessories (Caldwell Claymore, Tipton) .
  • Working capital headwinds: operating cash outflow driven by accounts receivable timing and inventory build for holiday/Q3; operating cash outflow of $7.9M in Q2 and inventories up $4.9M sequentially .
  • Anticipated margin moderation in 2H: Q3 gross margin guided ~45% due to amortization of tariff/freight variances and delayed promotions; tariff exposure remains a watch item into FY26 .

Financial Results

MetricQ2 2024Q1 2025Q2 2025Q3 2025
Revenue (Net Sales, $USD Millions)$57.93 $41.64 $60.23 $58.51
GAAP Gross Margin %45.7% 45.4% 48.0% 44.7%
GAAP Diluted EPS ($)$0.01 ($0.18) $0.24 $0.01
Non-GAAP Diluted EPS ($)$0.25 $0.06 $0.37 $0.21
Adjusted EBITDAS ($USD Millions)$5.24 $1.99 $7.49 $4.73
Adjusted EBITDAS Margin %9.0% 4.8% 12.4% 8.1%
GAAP Net Income ($USD Millions)$0.08 ($2.37) $3.11 $0.17

Segment and Channel KPIs (Q2 FY2025):

MetricQ2 2025
Outdoor Lifestyle Net Sales Growth y/y+5.4%
Shooting Sports Net Sales Growth y/y+1.9%
Traditional Channel Net Sales Growth y/y+4.3%
E-commerce Channel Net Sales Growth y/y+3.5%
Domestic Net Sales Growth y/y+3.4%
International Net Sales Growth y/y+14.8%
International Net Sales ($) and Mix$3.4M (~6% of sales)

Balance Sheet and Cash KPIs (Q2 FY2025):

MetricQ2 2025
Cash and Cash Equivalents ($USD Millions)$14.223
Debt$0 (no debt)
Inventories ($USD Millions)$111.566
Shares Repurchased~111,000 shares; ~$1.0M at $9/share
Highest Shipping MonthOctober (record shipments)

Estimate Comparison (Q2 FY2025):

MetricActualConsensus
Revenue ($USD Millions)$60.23 N/A – S&P Global consensus unavailable at time of analysis
GAAP Diluted EPS ($)$0.24 N/A – S&P Global consensus unavailable at time of analysis
Non-GAAP Diluted EPS ($)$0.37 N/A – S&P Global consensus unavailable at time of analysis

Note: Wall Street consensus from S&P Global was unavailable during request; comparisons to estimates could not be verified.

Non-GAAP Adjustments: Non-GAAP figures exclude amortization of acquired intangibles, stock compensation, technology implementation, emerging growth status transition costs, other items, and include tax adjustments where applicable .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($USD Millions)FY2025“Up to +2.5% y/y” $205–$210 Raised
Adjusted EBITDAS (% of Sales)FY20255.5%–6.0% 6.6%–7.1% ($13.5–$15.0M) Raised
GAAP Gross Margin %FY2025~45% ~45.5% Raised
Net Sales GrowthQ3 FY2025Not provided~+5% New detail
GAAP Gross Margin %Q3 FY2025Not provided~45% New detail
Operating ExpensesFY2025Slightly higher y/y on variable selling/distribution Slightly higher y/y (maintained view) Maintained
Income Tax (GAAP)FY2025Small expense each quarter (valuation allowance) No update provided (unchanged framework)Maintained
Net Sales ($USD Millions)FY2026Not provided$220–$230 Established

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 FY2025 and Q3 FY2025)Current Period (Q2 FY2025)Trend
Innovation/new productsQ1: New products ~23% of sales; pipeline robust; BUBBA Smart Fish Scale momentum . Q3: Launch of Caldwell ClayCopter and BUBBA SFS Lite to expand addressable markets .In-line products drove Q2 growth ahead of major launches; strong retailer preview reactions for SHOT Show lineup .Strengthening; multi-brand innovation pipeline underpinning FY25–FY26 visibility.
Distribution expansionQ1: New retail placements; strong Canada push; international net sales +21% . Q3: Broader retail placement for BOG/Caldwell/Grilla/MEAT! .Retailer commitments for expanded shelf space; early load-ins accelerating .Expanding placements; earlier load-ins providing near-term growth.
Tariffs & supply chainQ1: FY25 GM ~45% with quarterly fluctuations from tariff/freight amortization . Q3: 2H GM lower than 1H; multiple levers (IP/pricing, DTC, supplier optionality) .Q3 GM guided ~45% due to tariff/freight variance amortization and delayed promotions .Managed headwind; optionality emphasized; monitoring policy changes into FY26.
Category mixQ1: Shooting Sports softness; accessories strength; Outdoor Lifestyle nearly flat . Q3: Outdoor Lifestyle +15.1%; Shooting Sports +~3% .Outdoor Lifestyle +5.4%; Shooting Sports +1.9%; accessories offset personal protection softness .Mix shifting to Lifestyle; diversified SS accessories mitigate PPS softness.
Capital allocationQ1: Cash $23.5M, no debt; buybacks; CapEx 2% of sales model . Q3: Cash $17.1M; ~$1.2M buybacks; FY25 CapEx $4.0–$4.5M .Cash $14.2M; no debt; ~$1.0M buybacks in Q2; FY25 CapEx plan reiterated .Consistent discipline; buybacks opportunistic; organic growth priority.
InternationalQ1: International net sales $4.4M (>10% of sales), +21% y/y . Q3: Continued expansion; inventory target ~$110M for FY26 growth .International net sales $3.4M (~6% of sales), +~15% y/y .Growing, with Canada leading; quarter-to-quarter mix varies with seasonality.

Management Commentary

  • CEO: “Our second quarter results came in ahead of our expectations…we delivered a significant increase of roughly 43% in Adjusted EBITDAS…demonstrate the success of our long-term strategy to leverage our innovation advantage” .
  • CEO on pipeline: “Significant number of very exciting new products…debut publicly at SHOT Show in January 2025…retailers provided…strong, early order indications; commitments for expanded shelf space” .
  • CFO: “We ended the quarter with $14.2 million in cash and no debt…repurchasing roughly $1.0 million of our common stock…increasing our guidance for fiscal 2025, and providing our initial net sales outlook for fiscal 2026” .
  • CFO on margin drivers: “Gross margin for Q2 was 48%,…due to expected favorable inbound freight costs and the timing of…promotional programs…” .

Q&A Highlights

  • Retailer purchasing timeline and early load-ins: Retailers are accelerating load-ins ~6 months earlier due to innovation, driving near-term inventory builds and visibility beyond FY2025 .
  • Shooting Sports performance: Accessories (Caldwell Claymore, Tipton) strength offset personal protection softness; strategy to focus on more stable shotgun sports .
  • Capital allocation and buybacks: Priorities unchanged—organic growth, disciplined M&A, buybacks when undervalued; $10M authorization effective Oct 2024 .
  • Gross margin trajectory and tariffs: Q3 GM ~45% on tariff/freight amortization and delayed promos; management details levers (IP/pricing, new products, DTC, supplier flexibility) to mitigate tariff impacts .
  • M&A funnel: More opportunities in Outdoor Lifestyle; Shooting Sports quieter; looking for authentic brands and recurring revenue potential; pipeline paused in some cases due to tariff uncertainty .

Estimates Context

  • S&P Global consensus estimates were unavailable at the time of analysis; therefore, we could not validate beats/misses versus Wall Street consensus. Management stated Q2 results were ahead of internal expectations .
  • Implication: Sell-side models may need to incorporate raised FY25 guidance (net sales $205–$210M; Adjusted EBITDAS $13.5–$15.0M; GM ~45.5%) and FY26 net sales outlook ($220–$230M), plus Q3 gross margin ~45% and ~5% net sales growth .

Key Takeaways for Investors

  • Near-term: Raised FY25 guide and Q3 specifics (GM ~45%, ~5% net sales growth) provide catalysts; earlier retailer load-ins and innovation-led launches could support sequential sales momentum despite seasonal cash outflows and 2H margin normalization .
  • Medium-term: FY26 net sales outlook ($220–$230M) underpinned by multi-brand innovation (ClayCopter, BUBBA SFS Lite) and expanded distribution; potential estimate upward revisions warranted .
  • Margin dynamics: Expect 2H margin moderation from tariff/freight amortization and promotions; long-term levers (IP-protected innovation, DTC, supplier optionality) should sustain margin profile .
  • Category mix: Outdoor Lifestyle continues to gain share; diversified Shooting Sports accessories mitigate personal protection volatility, supporting more resilient growth .
  • Capital discipline: Asset-light model, cash $14.2M, no debt, ongoing buybacks (~$1.0M in Q2) and CapEx ~2% of sales provide flexibility for organic growth and opportunistic M&A .
  • Watch items: Tariff policy evolution into FY26; retailer promotional cadence; working capital normalization (AR collections, inventory trending to ~$110M by year-end) .