Executive Summary

Q4 2024 net sales were $143.5M, down 13.2% year over year, with Solo Stove declining due to a lack of significant new product launches while Chubbies grew double digits; adjusted gross margin improved to 61.0% and adjusted EPS was $0.03 .
Full-year 2024 revenue of $454.6M and adjusted EBITDA margin of 7.2% missed the company’s prior guidance of $470–$490M and 9–10%; management paused forward guidance amid uneven consumer trends and tariff uncertainty, and disclosed substantial doubt about going concern .
Liquidity tightened: year-end cash was $12.0M, inventory $108.6M, debt $69.0M (revolver) and $83.0M (term loan); subsequently, the company drew $277.3M on its revolver and warned about covenant compliance risks pending refinancing plans .
Strategic transformation accelerated: 30+ initiatives to reset cost structure, overhaul marketing (including use of leading-edge AI tools), simplify pricing/promotion, and ramp product launches—management expects more visible upside in 2H 2025 .
Potential stock reaction catalysts: guidance withdrawal and going concern disclosure (negative), plus upcoming 2025 refinancing developments and execution updates on turnaround actions (event risk) .

What Went Well and What Went Wrong

What Went Well

Adjusted gross margin improved 170 bps YoY to 61.0% in Q4 (reported gross margin +280 bps to 61.1%), reflecting pricing/mix and non-GAAP adjustments; full-year adjusted gross margin was 61.7%, up 30 bps YoY .
Chubbies segment grew Q4 sales 12.2% to $24.2M with improved segment EBITDA margins (13.7%), driven by stronger retail demand and owned-store performance .
Management is executing a detailed turnaround plan (“30+ value accretive initiatives”), including resetting cost structure and revamping marketing; “identify the appropriate partners and leading-edge AI tools with the potential to increase efficiency dramatically and reignite our brands” .

What Went Wrong

Q4 net sales fell 13.2% YoY to $143.5M, with Solo Stove down 16.8% due to a lack of significant new product launches; adjusted EBITDA fell to $6.3M (4.4% margin) from $14.9M (9.0% margin) a year ago .
Full-year revenue ($454.6M) and adjusted EBITDA margin (7.2%) missed prior guidance ($470–$490M and 9–10%), and management paused forward guidance due to uneven demand and tariff uncertainty .
Liquidity and leverage concerns escalated: subsequent $277.3M revolver draw and going concern disclosure; management flagged difficulty maintaining covenant compliance without successful mitigating strategies/refinancing .

Financial Results

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Net Sales ($USD Millions)	$165.318	$131.550	$94.139	$143.537
GAAP EPS ($USD)	$(2.14)	$(0.05)	$(1.19)	$(0.63)
Adjusted EPS ($USD)	$0.13	$0.04	$0.02	$0.03
Gross Margin (%)	58.3%	62.8%	41.8%	61.1%
Adjusted Gross Margin (%)	59.3%	63.6%	61.9%	61.0%
Adjusted EBITDA ($USD Millions)	$14.868	$15.449	$6.499	$6.324
Adjusted EBITDA Margin (%)	9.0%	11.7%	6.9%	4.4%

Segment breakdown (Q4 quarter):

Segment	Q4 2023 Net Sales ($MM)	Q4 2024 Net Sales ($MM)	Q4 2023 Segment EBITDA ($MM)	Q4 2024 Segment EBITDA ($MM)
Solo Stove	$140.206	$116.612	$14.378	$6.108
Chubbies	$21.537	$24.155	$1.855	$3.316

Key KPIs (Balance sheet and cash flow):

KPI	Q2 2024 (6/30)	Q3 2024 (9/30)	Q4 2024 (12/31)
Cash & Cash Equivalents ($MM)	$20.100	$12.494	$11.980
Inventory ($MM)	$100.780	$106.800	$108.575
Revolver Balance ($MM)	$75.0	$75.0	$69.0
Term Loan Balance ($MM)	$88.8	$87.5	$83.0
Net Cash from Operating Activities (FY/period)	$(2.848) (H1’24)	$(2.470) (9M’24)	$10.517 (FY’24)

Note: Subsequent to year-end, revolver draw of $277.3M disclosed (not shown above as it occurred post-12/31) .

Estimate comparison: S&P Global Wall Street consensus data for DTC was unavailable due to mapping limitations; therefore, estimate comparisons are not presented.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance (Q4)	Change
Revenue	FY 2024	$470–$490M (lowered in Q2; reaffirmed in Q3)	Actual: $454.6M	Missed vs guidance
Adjusted EBITDA Margin	FY 2024	9%–10% (lowered in Q2; reaffirmed in Q3)	Actual: 7.2%	Missed vs guidance
Forward Guidance Policy	2025 outlook	N/A	Guidance paused due to consumer/tariff uncertainty	Withdrawn/Paused

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q4 2024)	Trend
Marketing effectiveness & overhaul	Q2: Broader channel mix, 360° campaign starting Aug; bundling to offset promos; website refresh planned to Salesforce; consumer traffic softer	Resetting marketing approach under Interim CMO Liz Vanzura; leverage “leading-edge AI tools” to increase efficiency; less promotional stance	Intensifying transformation
Product pipeline & innovation	Q2: Building multiyear Solo Stove pipeline incl. adjacent categories; new SVP Product Dev; Asia trip for opportunities	“Accelerating and amplifying new product launches” to drive momentum in latter half; pricing simplification and repricing	Execution emphasis 2H 2025
Channel mix (DTC vs retail) & bundling	Q2: DTC softness; retail strength; bundling raises AOV; aim to expand omnichannel footprint	Q4: Solo Stove down due to lack of major launches; Chubbies retail demand strong; strategy to be less promotional and avoid channel conflicts	Mixed; retail resilient, DTC pressured
Supply chain & freight	Q2: New delivery contract to reduce costs; scale supply chain for margin expansion	Renegotiated freight contracts mid-2024; consolidating distribution centers, subleasing facilities	Cost actions progressing
Tariffs & macro	Q2: Macro caution; no tariff specifics	Significant tariff headwinds; mitigation by shifting production to alternative countries; uncertainty on duration/operation	New headwind emerging
Liquidity, debt & covenants	Q2/Q3: Revolver capacity $350M; net leverage 3.3x (Q2)	Subsequent $277.3M revolver draw; going concern disclosure; potential covenant challenges pending refinancing	Deteriorating liquidity risk

Management Commentary

“We are now aggressively working through 30-plus value-accretive initiatives to return Solo Brands to profitable and sustainable growth.” — John Larson, Interim CEO .
“My focus is 100% on optimizing the bottom-line and preserving cash… resetting the organization's cost structure… resetting our marketing approach… strategically repricing our portfolio… accelerating and amplifying new product launches.” — John Larson .
“We have decided to pause our financial guidance based on the challenging and uneven consumer environment anticipated this year and uncertainty with tariffs.” — Laura Coffey, CFO .
“We hired external financial advisors to help us go through every line item of the business.” — Company release .
“Liz Vanzura… has now agreed to serve as the company's Interim CMO… identify the appropriate partners and leading-edge AI tools with the potential to increase efficiency dramatically and reignite our brands.” — John Larson .

Q&A Highlights

The company did not take Q&A in Q4; management opted to forgo questions and deliver prepared remarks only .
Clarifications delivered in prepared remarks included guidance pause, tariff mitigation plans, and liquidity/covenant risks with intent to evaluate refinancing strategies .

Estimates Context

Wall Street consensus estimates from S&P Global were unavailable due to a missing company mapping for ticker DTC; as a result, estimate comparisons are not included.

Key Takeaways for Investors

Full-year revenue ($454.6M) and adjusted EBITDA margin (7.2%) missed prior guidance; Q4 adjusted EBITDA margin compressed to 4.4% as Solo Stove sales declined on limited new launches—expect cautious near-term positioning .
Liquidity risk elevated: subsequent $277.3M revolver draw and going concern disclosure; watch for covenant status and refinancing updates—near-term event risk is high .
Chubbies continues to be a relative bright spot with Q4 sales +12.2% and improved segment EBITDA; supports diversified exposure within the portfolio .
Strategic transformation underway (30+ initiatives) to reset cost structure, overhaul marketing (including AI tools), optimize pricing/promotion, and accelerate product launches—management targets more visible upside in 2H 2025 if execution holds .
Tariff uncertainty is a new material headwind; mitigation includes shifting production locations, but duration and operation of tariffs could significantly impact operations near term .
Guidance withdrawal and reduced visibility are likely to pressure sentiment until evidence of turnaround traction and refinancing clarity emerges; focus on Q1/May updates and operational KPIs (gross margin durability, DTC traffic conversion, inventory turns) .
Monitor Solo Stove innovation cadence and marketing ROI, as Q4 softness was tied to fewer significant launches; sustained adjusted gross margins (61%+) are a positive base if growth resumes .

Additional Context: Other Relevant Q4 Press Releases

Solo Stove announced a milestone partnership as the New York Islanders’ exclusive jersey patch partner and naming rights for Solo Stove Plaza at UBS Arena—brand visibility initiative in a key market .

Solo Brands, Inc. (DTC)·Q4 2024 Earnings Summary