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Clarus Corp (CLAR)·Q3 2025 Earnings Summary

Executive Summary

  • Revenue rose 3% year-over-year to $69.3M and adjusted EBITDA increased 15% to $2.8M; Outdoor was down 1% due to timing/D2C softness, while Adventure grew 16% on Australia wholesale and RockyMounts contribution .
  • Versus S&P Global consensus, Clarus delivered a revenue beat (+4.4%) but a slight adjusted EPS miss ($0.05 actual vs $0.055 estimate); EBITDA was below Street on a GAAP basis as tariffs/FX weighed on margins (values from S&P Global)*.
  • Management continued to withhold formal FY25 guidance amid tariff/macro uncertainty but indicated expected Q4 free cash generation and year-end cash of $35–$40M, and highlighted tariff mitigation actions planned for 2026 .
  • Strategic positives: Black Diamond apparel +29% y/y and healthier revenue mix (full-price up, discounted down); challenges: D2C weakness, Adventure gross margin compression from tariffs, freight, and inventory clear-outs .

What Went Well and What Went Wrong

  • What Went Well

    • “Adventure segment sales increased 16%, supported by solid results in the core Australia market” .
    • “A key highlight in the Outdoor segment has been the success of the revamped Black Diamond apparel line, which saw sales growth of 29% over the prior year period” .
    • Outdoor gross margin improved to 36.0% (from 33.2%) despite FX/tariff headwinds; full-price mix up with discounted sales down 37% and apparel margins up 650 bps .

  • What Went Wrong

    • D2C softness offset Outdoor strength: North America D2C down 16.5% and Europe D2C down 16% y/y, pressuring top line despite wholesale gains .
    • Adventure gross margin fell to 33.2% (from 40.1%) due to U.S. tariffs, freight, and inventory clear-outs; pricing in Australia lagged cost inflation, eroding margins .
    • FX contract losses suppressed Outdoor margins with ~$0.6M EBITDA impact in Q3 and ~$1.3M YTD; tariff burden remains material until 2026 mitigation takes hold .

Financial Results

Year-over-Year (Q3 2024 → Q3 2025)

MetricQ3 2024Q3 2025
Revenue ($USD Millions)$67.115 $69.347
GAAP Diluted EPS ($)$(0.08) $(0.04)
Adjusted EPS ($)$0.05 $0.05
Gross Margin % (reported)35.0% 35.1%
Adjusted Gross Margin %37.8% 35.1%
Adjusted EBITDA ($USD Millions)$2.438 $2.799
Adjusted EBITDA Margin %3.6% 4.0%

Sequential Trend (Q1 → Q2 → Q3 2025)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$60.433 $55.247 $69.347
GAAP Diluted EPS ($)$(0.14) $(0.22) $(0.04)
Adjusted EPS ($)$(0.02) $(0.03) $0.05
Gross Margin % (reported)34.4% 35.6% 35.1%
Adjusted Gross Margin %34.6% 36.5% 35.1%
Adjusted EBITDA ($USD Millions)$(0.761) $(2.096) $2.799
Adjusted EBITDA Margin %(1.3)% (3.8)% 4.0%

Segment Breakdown (Q3)

MetricQ3 2024Q3 2025
Outdoor Revenue ($USD Millions)$49.287 $48.688
Adventure Revenue ($USD Millions)$17.828 $20.659
Outdoor Adjusted EBITDA ($USD Millions)$4.397 $4.730
Adventure Adjusted EBITDA ($USD Millions)$0.252 $0.349
Corporate Adjusted EBITDA ($USD Millions)$(2.211) $(2.280)

KPIs and Operating Items

KPIQ3 2024Q3 2025
Free Cash Flow ($USD Millions)$(9.4) $(6.9)
Operating Cash Flow ($USD Millions)$(8.3) $(5.7)
Capital Expenditures ($USD Millions)$1.1 $1.2
Cash & Equivalents ($USD Millions)$45.4 $29.5
Total Debt ($USD Millions)$1.9 $2.0
NA Wholesale delta (Outdoor)—+$3.1 (+16%)
RockyMounts contribution ($USD Millions)—$1.5

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025Withdrawn (Q1 2025) Not providing (Q3 2025) Maintained no guidance
Adjusted EBITDAFY 2025Withdrawn (Q1 2025) Not providing (Q3 2025); non-GAAP reconciliation not provided Maintained no guidance
CapexFY 2025Withdrawn (Q1 2025) Not providing (Q3 2025) Maintained no guidance
Free Cash FlowFY 2025Withdrawn (Q1 2025) Not providing (Q3 2025); expects Q4 FCF and year-end cash $35–$40M Qualitative update
DividendQuarterly$0.025/share declared 7/30/25 No change disclosed in Q3Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Tariffs/macroWithdrew FY25 guidance due to tariffs/macro; implemented mitigation to offset ~half of 2025 impact Reciprocal tariffs rose to 20–35%+; unrecovered 2025 EBITDA impact $2.5–$3.5M; plan to offset ~70% in 2026, leaving ~$3.2M unrecovered Persistent headwind; mitigation improving in 2026
FXNot highlighted in Q1 press; limited detail Q2~$0.6M Q3 EBITDA impact; ~$1.3M YTD; contracts roll off end-2025 Headwind easing after 2025
Product performanceApparel bookings up 30–50% in regions; Outdoor simplification ongoing Black Diamond apparel +29% y/y; margins +650 bps; full-price mix up; discounted down 37% Improving mix/margins
Regional trendsAustralia wholesale challenged; RockyMounts added $1.3M in Q1 Adventure +16% y/y on Australia wholesale; RockyMounts +$1.5M; NA wholesale strong (+16%) Adventure stabilizing; NA wholesale strong
D2CPullback in D2C; mix shift to full price (Q2) NA D2C −16.5%, EU D2C −16%; improving channel margins Top-line soft, profitability better
Regulatory/legalOngoing CPSC/DOJ matters; legal costs adjusted in non-GAAP DOJ grand jury subpoenas; CPSC investigation; continued cooperation; legal costs $1.0M in Q3 Ongoing; watch legal spend
Supply chainTariff mitigation and country-of-origin shifts planned New sourcing outside China in 2026 for key categories; 3PL in Netherlands for Adventure Rebalancing underway

Management Commentary

  • “We continued to make incremental progress against our operational initiatives, reflected in Q3 revenue and adjusted EBITDA growth year-over-year… Adventure segment sales increased 16%… Black Diamond apparel line… saw sales growth of 29%” — Warren Kanders, Executive Chairman .
  • “We estimate the unrecovered impact of tariffs on EBITDA will be $2.5–$3.5 million in 2025… expect to offset about 70% of the annualized tariff impact next year… leaving approximately $3.2 million unrecovered” — Neil Fiske, President, Black Diamond .
  • “Gross margin at Outdoor was 36.0%… Adventure’s gross margin was 33.2%… We reduced SG&A by $600,000 versus the third quarter of last year” — Mike Yates, CFO .

Q&A Highlights

  • Outdoor offsets to apparel strength: Outdoors flat due to PIEPS divestiture and global D2C weakness; NA wholesale captured apparel gains .
  • Spring 2026 order book: “Order books look pretty good… cautious tone from retail partners; momentum with REI/MEC/Amazon and specialty” .
  • Holiday outlook: “Environment more promotional; retailers cautious; prudent to remain cautious” .

Estimates Context

MetricQ1 2025Q2 2025Q3 2025
Revenue Estimate ($USD)$56.6528M*$53.4938M*$66.4284M*
Revenue Actual ($USD)$60.433M $55.247M $69.347M
EPS Estimate ($)$0.0075*$(0.01)*$0.055*
EPS Actual ($)$(0.02) adjusted $(0.03) adjusted $0.05 adjusted
EBITDA Estimate ($USD)$0.5894M*$(0.6586)M*$2.7040M*
EBITDA Actual ($USD)$(2.715)M GAAP*$(4.140)M GAAP*$1.254M GAAP*

Values retrieved from S&P Global.
Implications: Q3 revenue beat (~+$2.9M vs consensus); adjusted EPS slight miss; GAAP EBITDA below consensus, contrasting with company-reported adjusted EBITDA of $2.8M (non-GAAP adds back legal, stock comp, restructuring, etc.) .

Key Takeaways for Investors

  • Mixed headline: revenue beat and adjusted EBITDA growth, but adjusted EPS slightly below Street and GAAP EBITDA under consensus due to tariffs/FX; expect continued non-GAAP normalization as tariff mitigation and FX contract roll-off progress (2026) .
  • Outdoor momentum is real: apparel +29%, full-price mix improving, gross margin +320 bps y/y; NA wholesale strength offsets D2C pullback — watch Q4 promotional intensity and retailer caution .
  • Adventure re-set in motion: Australia wholesale recovery, RockyMounts contribution, SG&A cuts; margin headwinds remain until pricing resets and fitment/product roadmap execution take hold .
  • Liquidity resilient: nearly debt-free with $29.5M cash at Q3 and expected year-end $35–$40M; free cash outflow improved y/y, with Q4 FCF expected .
  • Legal overhang persists: DOJ/CPSC matters continue; management adjusts legal costs in non-GAAP — monitor resolution/timeline and quarterly cash impact .
  • Stock reaction catalysts: narrative likely driven by revenue beat and apparel strength vs EBITDA/GAAP margin pressure from tariffs/FX; Q4 execution and visibility into 2026 mitigation are key triggers .
  • No formal FY25 guidance: maintain cautious positioning; focus on sequential margin progress, Adventure pricing actions, and Outdoor D2C stabilization .