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American Outdoor Brands, Inc. (AOUT)·Q3 2025 Earnings Summary

Executive Summary

  • Net sales rose 9.5% year over year to $58.5M; GAAP diluted EPS was $0.01 and non-GAAP EPS was $0.21, with gross margin at 44.7% (+200 bps YoY) and Adjusted EBITDAS nearly doubling to $4.7M .
  • Guidance raised: FY25 net sales to $207–$210M (midpoint up), GAAP loss per share to $(0.27)–$(0.19) (less negative), and Adjusted EBITDAS to $14.5–$15.5M; FY26 net sales outlook reiterated at $220–$230M .
  • Strength broad-based: Outdoor Lifestyle grew 15.1% YoY; Shooting Sports up ~3%; traditional and e-commerce channels both +~9.5% YoY; domestic +10.1% .
  • Near-term watch items: Q4 margin headwinds from tariff/freight variance amortization; ~$1M order timing pulled into Q3 from Q4; retailer enthusiasm and new launches (Caldwell ClayCopter, BUBBA SFS Lite) are catalysts for FY26 .

What Went Well and What Went Wrong

What Went Well

  • Innovation-led execution: “Our third quarter results came in ahead of our expectations… leverage our innovation advantage to broaden our distribution… strengthen our margins” — Brian Murphy .
  • Channel strength and margin expansion: Traditional +9.6%, e-commerce +9.5%, GAAP gross margin +200 bps to 44.7%; non-GAAP EPS up to $0.21 and Adjusted EBITDAS +99% YoY .
  • Product launch momentum: Caldwell ClayCopter and BUBBA SFS Lite introduced in January; retailer response “overwhelmingly positive” reinforcing sales outlook .

What Went Wrong

  • Personal protection softness: CFO noted personal protection product sales down slightly, consistent with adjusted NICS declines; Shooting Sports growth (~3%) driven by accessories despite that headwind .
  • Gross margin cadence: Expected lower second-half margins vs first half due to increased amortization of tariff/freight variances in Q4 .
  • Timing pull-forward: ~$1M of orders originally slated for Q4 shifted into Q3, creating a non-recurring benefit to Q3 and a modest Q4 headwind .

Financial Results

Quarterly Trend (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Revenue (Net Sales, $USD Millions)$41.6 $60.2 $58.5
GAAP Diluted EPS ($)$(0.18) $0.24 $0.01
Non-GAAP Diluted EPS ($)$0.06 $0.37 $0.21
Gross Margin (%)45.4% 48.0% 44.7%
Adjusted EBITDAS ($USD Millions)$2.0 $7.5 $4.7
Adjusted EBITDAS Margin (%)4.8% 12.4% 8.1%

Year-over-Year – Q3 Comparison

MetricQ3 2024Q3 2025
Revenue (Net Sales, $USD Millions)$53.4 $58.5
GAAP Diluted EPS ($)$(0.23) $0.01
Non-GAAP Diluted EPS ($)$0.08 $0.21
Gross Margin (%)42.7% 44.7%
Adjusted EBITDAS ($USD Millions)$2.4 $4.7
Adjusted EBITDAS Margin (%)4.4% 8.1%

Segment Growth and Channel Mix

Segment/Channel YoY Growth (%)Q1 2025Q2 2025Q3 2025
Outdoor Lifestyle(1.7%) +5.4% +15.1%
Shooting Sports(7.0%) +1.9% ~+3.0%
Traditional Channel~flat +4.3% +9.6%
E-commerce Channel(10.2%) +3.5% +9.5%
Domestic Channel—+3.4% +10.1%
International Channel+21% (net sales $4.4M) +14.8% —

KPIs

KPIQ1 2025Q2 2025Q3 2025
Cash and Equivalents ($USD Millions)$23.5 $14.2 $17.1
DebtNo debt No debt No debt
Inventory ($USD Millions, balance sheet date)$106.7 (7/31) $111.6 (10/31) $115.8 (1/31)
Cash from Operations ($USD Millions)$(4.4) $(7.9) $5.9
CapEx ($USD Millions)$1.1 $0.47 $1.8
Trailing 12-Mo Adjusted EBITDAS ($USD Millions)$10.6 $12.9 $15.2
Share Repurchases ($USD Millions)~$0.4 ~$1.0 ~$1.2

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($USD Millions)FY25$205–$210 $207–$210 Raised (midpoint)
GAAP Loss per Share – Diluted ($)FY25$(0.36)–$(0.24) $(0.27)–$(0.19) Raised (less negative)
Adjusted EBITDAS ($USD Millions)FY25$13.5–$15.0 $14.5–$15.5 Raised
Gross Margin (%)FY25~45.5% (GAAP) ~45% (GAAP) Lowered
Net Sales ($USD Millions)FY26$220–$230 (initial) $220–$230 (reiterated) Maintained
Operating ExpenseFY25Slight increase vs prior year Slight increase vs prior year Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3)Trend
Innovation pipeline/new productsQ1: New products were 23% of sales; pipeline robust . Q2: SHOT Show previews; strong early orders .Caldwell ClayCopter and BUBBA SFS Lite launched; retailer enthusiasm “overwhelmingly positive” .Strengthening
Supply chain/tariffsQ1: Asset-light optionality; control what can be controlled . Q2: 2H margin lower due to tariff/freight variance amortization; discussed exposure .Optionality emphasized; flexible sourcing; monitoring evolving tariff landscape .Ongoing risk, managed
Distribution/channel expansionQ1: Canada growth; DTC noted . Q2: Expanded shelf space; retailer visibility .Traditional +9.6%, e-commerce +9.5%; new retail placements across brands .Improving
Consumer behaviorQ1: Shooting Sports softer; cautious consumer . Q2: Promotions likely in 2H; cautious outlook .Consumers cautious but innovation drives POS; premium positioning offers insulation .Cautious but resilient
M&A postureQ1: More outdoor lifestyle opportunities . Q2: Pipeline pause; focus on organic growth .Disciplined approach; preference for recurring/subscription revenue assets .Monitoring
CapEx/R&D cadenceQ1: ~2% of sales model; $1.1M . Q2: $0.47M .$1.8M in Q3; FY25 $4–$4.5M expected .Steady investment

Management Commentary

  • “Our third quarter results came in ahead of our expectations… leverage our innovation advantage to broaden our distribution opportunities, expand awareness of our brands, and strengthen our margins.” — Brian Murphy .
  • “We are increasing the midpoint of our net sales, earnings per share, and non-GAAP Adjusted EBITDAS guidance for fiscal 2025, and reiterating our net sales outlook for fiscal 2026.” — Andrew (Andy) Fulmer .
  • On tariffs and sourcing flexibility: “We have optionality… own our product designs and tooling… strong supplier partnerships… assess optimal responses to the dynamic tariff landscape.” — Brian Murphy .
  • On channel momentum: “Traditional channel net sales increased by 9.6% and e-commerce net sales increased by 9.5%… gross margin up 200 bps to 44.7%.” — Andy Fulmer .

Q&A Highlights

  • New product mix and pipeline: Management reiterated new products typically represent 20–25% of net sales and highlighted expansion into sustainable shotgun sports and broader fishing market via ClayCopter and BUBBA SFS Lite .
  • Tariff exposure and strategy: Emphasized nimble, asset-light approach; IP-driven pricing power; DTC and subscription revenue levers to protect margins amid evolving tariff regime .
  • Consumer behavior: Noted cautious consumers; innovation keeps POS strong; premium pricing offers insulation with more affluent customer base .
  • Guidance mechanics: Q3 included ~$1M order timing shift from Q4; FY25 net sales narrowed/raised; FY26 net sales outlook reaffirmed on strong retailer feedback .
  • M&A: Disciplined posture; favor recurring/subscription revenue opportunities; pipeline seeing some pause given macro/tariff uncertainty .

Estimates Context

  • Wall Street consensus (S&P Global) for Q3 2025 EPS and revenue was unavailable due to system limits, so beat/miss vs sell-side cannot be determined here. Management stated Q3 results were ahead of internal expectations, and FY25 guidance was raised with FY26 net sales outlook maintained .
  • Investors should monitor updated consensus following the guidance raise, particularly Adjusted EBITDAS expectations and gross margin cadence into Q4 (amortization effects) .

Key Takeaways for Investors

  • Guidance raise with broad-based growth (Outdoor Lifestyle +15.1%, Shooting Sports ~+3%, channels +~9.5%) supports a strengthening FY25 trajectory and FY26 acceleration; near-term catalyst is retailer load-ins and innovative product launches (ClayCopter, SFS Lite) .
  • Margin narrative: Q3 gross margin expanded YoY to 44.7%, but expect lower margins in Q4 from tariff/freight variance amortization; watch gross margin prints vs guide (~45% for FY25) .
  • Cash discipline and asset-light model intact; Q3 operating cash generation ($5.9M), no debt, ongoing buybacks (~$1.2M Q3) provide flexibility for organic growth and selective M&A .
  • Personal protection remains soft; management’s shift toward more stable shotgun sports/accessories and premium positioning is mitigating category cyclicality .
  • Order timing pulled ~$1M from Q4 into Q3; expect some normalization in Q4 prints; monitor sell-through and load-in cadence into FY26 .
  • Strategic optionality on tariffs (IP, sourcing flexibility, DTC, subscriptions) reduces risk to profitability as policy evolves; track any revisions to FY26 margin outlook tied to tariff developments .
  • Actionable: Position for narrative on innovation-driven growth and guidance momentum; near-term trading sensitivity to Q4 margin cadence and any updates to FY26 outlook post retail resets and spring product placements .