Axil Brands, Inc. (AXIL)·Q1 2026 Earnings Summary

Executive Summary

• Q1 FY2026 net sales were $6.86M, up 17.2% YoY; diluted EPS was $0.04 vs a loss of $0.02 a year ago as operating leverage improved despite lower gross margin from a higher wholesale mix .
• Adjusted EBITDA was $0.67M (9.8% margin) vs $0.17M (2.9%) YoY; operating income was $0.41M vs a loss of $0.14M in the prior-year quarter, driven by flat OpEx YoY and mix shift to retail/wholesale .
• Management highlighted entry into Costco (XCOR SE earbuds in-store/online; X30i bundle online) and a product roadmap including GS Extreme 3.0 for the holiday season; Reviv3 launched in Chatters (Canada) to reinvigorate hair/skin care .
• S&P Global consensus estimates were not available for Q1 FY2026 (no EPS or revenue consensus shown); therefore, beat/miss vs Street could not be assessed using S&P data. Values retrieved from S&P Global.*
• Shares rose ~0.2% since results but fell ~19% over the prior month, suggesting mixed sentiment despite operational progress; retail expansion and margin trajectory are likely near-term stock drivers .

What Went Well and What Went Wrong

• What Went Well

  • Demonstrated operating leverage: OpEx was 61.6% of sales (vs 73.4% YoY), swinging to $0.41M operating income and $0.04 diluted EPS .
  • Channel diversification produced growth: initial shipments to a national membership-based retailer boosted wholesale mix; hearing products revenue grew ~25% YoY within AXIL-branded hearing .
  • Product and channel catalysts: GS Extreme 3.0 targeted for the holiday season and Reviv3 launched across 115+ Chatters salons in Canada to revive the beauty segment .

• What Went Wrong

  • Gross margin compression: GM was 67.6% vs 71.0% YoY, reflecting greater wholesale mix (lower GM but better OpEx leverage vs DTC) .
  • Working capital drag: net cash used in operations was $(0.74)M on higher AR and inventory to support wholesale growth and a new customer PO .
  • Macro/trade risks persist: management continues to cite tariff exposure, supply chain transition execution, and general macro uncertainty as ongoing risk factors .

Financial Results

Segment and KPIs

• Segment disclosures: Quantitative segment revenue not disclosed; management noted ~25% YoY growth in AXIL-branded hearing products in Q1 FY2026 .

Guidance Changes

Notes: Management provided directional commentary (inventory expected to normalize; increased wholesale presence; GS Extreme 3.0 launch for holiday season) but no quantitative guidance ranges .

Earnings Call Themes & Trends

Note: A Q1 FY2026 earnings call transcript was not available in our sources; themes below draw from company press releases.

Management Commentary

• “Initial shipment of our AXIL hearing products to a new national membership-based retail chain was a key driver of this mix shift and helped our total revenue grow 17% year-over-year.” — Jeff Toghraie, CEO .
• “An increased mix of wholesale retail revenue should continue to benefit the Company, as this channel offers greater profitability and operating leverage than our online e-commerce channel. While gross margins alone are slightly higher in the e-commerce channel than in the wholesale channel, our online sales also carry with it greater sales and marketing expenses and customer acquisition costs than the offline retail channel.” .
• “Our product roadmap includes the introduction of numerous new products… beginning with the next generation GS Extreme 3.0 product that is set to launch in time for the holiday season.” .
• “Inventory increased appreciably… given the increased product supply needed to service our wholesale segment and an initial purchase order from a new customer. We expect that to normalize over time.” .
• “We see a pathway for the hair and skin care segment to become more than just a dormant or hidden asset… our new relationship with Chatters… was established shortly after bringing on a new leader.” .

Q&A Highlights

• The Q1 FY2026 earnings call transcript was not available; no Q&A details or clarifications beyond the press release could be reviewed [Search attempt yielded none].

Estimates Context

• S&P Global consensus: No Q1 FY2026 EPS or revenue consensus data were available; only actuals appeared in the feed. Consequently, we cannot assess beat/miss vs Street for this quarter. Values retrieved from S&P Global.*
• Given the lack of consensus, future estimate revisions (if any) would likely focus on: wholesale-driven revenue trajectory, gross margin normalization path, and Adj. EBITDA margin recovery as retail scale and mix settle .

Key Takeaways for Investors

• Wholesale/retail channel is now a tangible growth engine; expect continued revenue benefits but monitor gross margin dilution and Adj. EBITDA margin recovery as scale improves .
• Operating leverage proved resilient (OpEx % down YoY) and supported a swing to positive EPS; sustaining discipline through product launches will be key .
• Working capital investment (AR/inventory) is up to support wholesale commitments; watch cash conversion and the pace of inventory/AR normalization in Q2–Q3 .
• Near-term catalysts include Costco roll-out efficacy and GS Extreme 3.0 holiday launch; execution could drive upside to sell-through and operating leverage .
• Beauty (Reviv3) is re-accelerating via Chatters and new leadership; contribution is early but could diversify revenue/margin over time .
• Macro/trade and supply chain transition remain risk factors; management’s shift toward U.S.-based capabilities aims to mitigate tariff and resilience risks .
• With no formal guidance or S&P consensus, stock reaction will likely hinge on evidence of sell-through, margin path, and cash generation; the stock’s muted post-print move vs month-downtrend suggests investors await proof points .

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References:

• Q1 FY2026 8-K and Exhibit 99.1 press release:
• Q3 FY2025 8-K and Exhibit 99.1 press release:
• Q2 FY2025 8-K and Exhibit 99.1 press release:
• Q1 FY2026 press release online:
• Stock reaction summary:

*Values retrieved from S&P Global.