Executive Summary

Q1 2025 revenue was $60.4M, down 13% YoY but above internal expectations; adjusted EBITDA was $(0.8)M and adjusted EPS was $(0.02) as Outdoor strength partly offset a sharp Adventure decline .
Management withdrew FY2025 guidance (revenue, adj. EBITDA, capex, FCF) citing tariff-driven macro uncertainty; dividend of $0.025/share was maintained ahead of the print .
Versus S&P Global consensus, revenue was a beat (+$3.9M), EPS was a miss (−$0.03), and EBITDA missed as consensus expected positive EBITDA; non-GAAP definitions and promotional mix drove variance (see Estimates Context) (*Values retrieved from S&P Global).
Key call themes: tariff mitigation and accelerated re-sourcing out of China (6–9 months); Black Diamond apparel bookings up 50% in U.S. and 30% in Europe; Adventure headwinds concentrated in three accounts; PIEPS divestiture signed at €7.8M, expected to close by Q3 2025 .

What Went Well and What Went Wrong

What Went Well

Outdoor delivered above-plan revenue ($44.3M) with strength in apparel and hardgoods; adjusted EBITDA +$1.7M despite macro softness .
Order book momentum: Black Diamond fall/winter apparel bookings up ~50% in U.S. and ~30% in Europe; new BD e-commerce site launched in April .
Balance sheet resilience: cash $41.3M, nearly debt-free except $1.9M RockyMounts obligation; free cash flow improved to $(3.3)M from $(18.3)M YoY .
Quote: “Q1 net sales of $60.4 million were above expectations…strengthening the core of our Outdoor segment” — Executive Chairman Warren Kanders .
Quote: “We see a healthy order book for our fall/winter season, with apparel bookings up 30% in Europe and 50% in North America.” — Black Diamond President Neil Fiske .

What Went Wrong

Adventure revenue fell 28% to $16.1M, driven by demand declines at global OEM, Australian wholesale, and lapse of a large U.S. off-price sale in Q1’24; segment adj. EBITDA was $(0.2)M .
Gross margin compressed to 34.4% (adj. 34.6%) on higher discontinued merchandise (including PFAS inventory clearance) and North America promotional effort; Adventure mix (MAXTRAX volumes down >$1M) weighed on margin .
Guidance withdrawn due to tariff uncertainty; management highlighted potential $3.5–$4.0M near-term margin hit at BD even after price actions; accelerated re-sourcing required .
Analyst concern: discontinued merchandise accounted for ~80–90 bps of Outdoor GM pressure; $2.7M DM in Q1 vs ~$2.1M prior year, increasing mix from 5.8% to 7.5% .

Financial Results

Consolidated Performance and Margins

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$67.1	$71.4	$60.4
Gross Margin (%)	35.0%	33.4%	34.4%
Adjusted Gross Margin (%)	37.8%	38.0%	34.6%
Adjusted EBITDA ($USD Millions)	$2.4	$4.4	$(0.8)
Adjusted EBITDA Margin (%)	3.6%	6.1%	(1.3)%
EPS – Continuing Ops (GAAP, $)	$(0.08)	$(1.92)	$(0.14)
Adjusted EPS – Continuing Ops ($, non-GAAP)	$0.05	$(0.08)	$(0.02)

Segment Revenue and Profitability

Segment Metric	Q1 2024	Q4 2024	Q1 2025
Outdoor Revenue ($M)	$47.0	$51.1	$44.3
Adventure Revenue ($M)	$22.3	$20.3	$16.1
Outdoor Adjusted EBITDA ($M)	$1.9	$4.5	$1.7
Adventure Adjusted EBITDA ($M)	$1.9	$1.6	$(0.2)

KPIs and Cash Flow

KPI	Q1 2024	Q4 2024	Q1 2025
SG&A ($M)	$28.2	$27.8	$26.6
Cash & Equivalents ($M)	$45.4	$45.4	$41.3
Total Debt ($M)	$1.9	$1.9	$1.9
Inventories ($M)	$82.3	$82.3	$87.5
Free Cash Flow ($M)	$(18.3)	$14.4	$(3.3)
Weighted Avg Diluted Shares (M)	38.208	38.262	38.366

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	FY 2025	$250–$260	Withdrawn	Lowered (withdrawn)
Adjusted EBITDA ($M)	FY 2025	$14–$16	Withdrawn	Lowered (withdrawn)
Capital Expenditures ($M)	FY 2025	$4–$5	Withdrawn	Lowered (withdrawn)
Free Cash Flow ($M)	FY 2025	$8–$10	Withdrawn	Lowered (withdrawn)
Dividend ($/share)	Quarterly	$0.025 (ongoing)	$0.025 confirmed May 6, 2025	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024 / Q4 2024)	Current Period (Q1 2025)	Trend
Tariffs/Macro	No broad-based tariff impact noted; macro softness and PFAS reserves pressured margins	Guidance withdrawn; price actions to cover 10% universal + 25% steel/aluminum; China 145% untenable; 6–9 month re-sourcing plan; net margin hit $3.5–$4.0M at BD if tariffs persist	Deteriorating macro visibility; aggressive mitigation underway
Supply Chain/Re-sourcing	N/A	Accelerate move out of China; new country of origin production expected by Q4; target complete by early 2026	Executing strategic pivot
Product Performance (BD Apparel)	Outdoor mix and simplification improved margins; PFAS reserve elevated	F/W apparel bookings +50% U.S., +30% Europe; new BD e-commerce site launched	Positive momentum
Adventure Segment Dynamics	OEM softness; Australian wholesale challenges	3 customers drove $6.5M→$1.1M YoY drop; RockyMounts $1.3M tailwind; specialty channel push; bike rack doors 300→800	Mixed; rebuilding distribution
Regulatory/Legal	PFAS inventory reserve; legal costs	DOJ subpoenas on avalanche beacons; new CPSC inquiry; ongoing Section 16B litigation status updates	Elevated oversight
Discontinued Merchandise/PFAS	PFAS reserves pressured Q3 margins	DM 7.5% of mix vs 5.8% PY; ~80–90 bps GM impact; clearing remaining PFAS inventory	Near-term margin headwind, tactical clearance
Divestiture	N/A	PIEPS sale signed at €7.8M; expected close by Q3 2025	Portfolio simplification

Management Commentary

“Against an increasingly challenging consumer backdrop…we continued to execute in line with our strategic roadmap…strengthening the core of our Outdoor segment and investing to scale our Adventure segment.” — Warren Kanders .
“Absent tariffs, we would be affirming our 2025 topline expectations…we are confronting tremendous uncertainty…we have taken up price accordingly and proportionately as of May 5.” — Neil Fiske .
“Clarus’ first quarter revenue of $60.4 million was above our Q1 guidance of $56 million…Adjusted EBITDA…was short of our guide of breakeven.” — Mike Yates .
“We entered into an agreement for the sale of PIEPS…€7.8 million…aligned with simplifying the business and rationalizing our product categories.” — Company release .
“We are withdrawing previously issued full year 2025 revenue, adjusted EBITDA, capital expenditures and free cash flow guidance…we intend to provide updated guidance once visibility improves.” — Company release .

Q&A Highlights

Tariffs and margin: No cancellations; BD will protect supply and market share; estimated net margin hit ~$3.5–$4.0M in 2025 with potential $1–$2M relief if re-sourcing accelerates .
Discontinued merchandise impact: DM mix 7.5% vs 5.8% last year; ~80–90 bps drag on Outdoor gross margin; $2.7M DM sold in Q1 (vast majority PFAS) .
PIEPS economics: ~$1.8M Q1 revenue, breakeven EBITDA; ~one-third of Q1 levels in Q2; annual revenue ~ $5M — divestiture expected margin accretive .
Retail strategy: Company-owned BD stores kept limited (8–10) as “brand labs”; Seattle flagship opened; Jackson Hole store partnership with Jackson Hole Mountain Guides to deepen community engagement .
Adventure distribution: Shift away from off-price; leaning into specialty rack/bike channels; RockyMounts expanded doors from ~300 to ~800 in Q1 .

Estimates Context

S&P Global consensus for Q1 2025: Revenue $56.7M*, Primary EPS $0.01*, EBITDA $0.59M*; Target Price $4.15*; Consensus Recommendation N/A* (*Values retrieved from S&P Global).
Actual vs consensus (S&P framework): Revenue $60.4M vs $56.7M (beat); Primary EPS −$0.02 vs $0.01 (miss by $0.03); EBITDA −$2.72M vs $0.59M (miss)*; Note: Company reports adjusted EBITDA of −$0.8M and adjusted EPS of −$0.02, indicating definition differences relative to S&P’s “actuals” (*Values retrieved from S&P Global).

Metric	Q1 2025 Consensus*	Q1 2025 Actual (S&P frame)*	Company Reported
Revenue ($USD)	$56,652,800*	$60,433,000*	$60,433,000
Primary EPS ($)	$0.0075*	−$0.02*	Adjusted EPS: −$0.02; GAAP EPS (cont. ops): −$0.14
EBITDA ($USD)	$589,400*	−$2,715,000*	Adjusted EBITDA: −$761,000

*Values retrieved from S&P Global.

Implications: Street likely revises Adventure expectations lower and adjusts margin trajectory to reflect promotional mix and DM clearance, while acknowledging Outdoor order book strength. Non-GAAP vs consensus definition alignment should be clarified in future models.

Key Takeaways for Investors

Near term: Guidance withdrawal and tariff uncertainty are the dominant stock drivers; expect elevated volatility into H2 as pricing/re-sourcing actions flow through .
Outdoor momentum: Healthy F/W apparel bookings and cleaner inventory (74% “A” styles) support margin recovery as DM clearance abates .
Adventure reset: Concentrated customer headwinds and channel mix explain the revenue step-down; specialty distribution build (and RockyMounts synergy) is the right fix but takes time .
Tariff mitigation roadmap: Price actions cover 10% universal and 25% steel/aluminum; accelerated China exit (6–9 months) is key; monitor $3.5–$4.0M margin hit trajectory .
Portfolio simplification: PIEPS sale at €7.8M should be margin accretive post-close; use of proceeds to bolster cash and flexibility .
Balance sheet support: Cash $41.3M and minimal debt provide runway to execute re-sourcing and brand investments despite macro noise .
Positioning: If tariff regime stabilizes and Adventure distribution rebuilds, Outdoor-led recovery plus cost discipline can reset the mid-term thesis; track BD apparel sell-through and Adventure door growth .

Clarus Corp (CLAR)·Q1 2025 Earnings Summary