American Outdoor Brands, Inc. Q2 FY2026 earnings call

• POS performance: Total POS up 4% year over year, second consecutive quarter of favorable POS. • Channel evolution: Traditional channel has shifting sales to online channels of retailers; e-commerce channel's online-only customer exposure reduced to 20%-25% of total net sales. • Innovation: New products drove over 31% of net sales; Caldwell's Claycopter named 2025 innovation of the year; strong innovation pipeline with new launches planned for SHOT Show. • Black Friday: Encouraging results with leading brands performing well, outdoor lifestyle POS in November up ~13%. • Retailer dynamics: Consumer health fractured with higher-income cohorts healthy and lower-income facing pressure; retailers have variable demand patterns.

In the second quarter, net sales were $57.2 million. The outdoor lifestyle category (products for hunting, fishing, etc.) had net sales of $34.6 million, down 5% compared to Q2 last year, driven by a decrease in meat processing equipment but offset by growth in BOG and Gorilla brands. The shooting sports category (target shooting, etc.) saw net sales decline 5.1%, with Caldwell's strong performance due to expanded distribution of innovative products. Traditional channel net sales increased 2.3% (making up ~65% of business), while e-commerce net sales decreased 15.9% (~35% of business), largely due to lower sales to a major online-only partner but offset by digital sales through traditional retailers' online platforms.

• Full fiscal 2026 net sales expected down ~13%-14% year over year from $222 million, but underlying decline ~5% when adjusting for accelerated orders. • Q3 net sales expected to decline ~8% year over year. • Gross margin expected in range of 42%-43% for Q3 and full fiscal 2026. • Total OpEx expected to decline in Q3 and full fiscal 2026. • Adjusted EBITDA for full fiscal 2026 expected in range of 4%-4.5% of net sales. • Tariff mitigation actions expected to fully offset tariff impact by fiscal 2027.

• Macro environment: Evolving consumer spending patterns and retail order volatility. • Consumer health: Fractured with lower-income cohorts facing pressure, affecting demand patterns. • Tariffs: Higher tariffs capitalized into inventory, with amortization starting in December, impacting gross margin in short term.

Q: About the 4% sell-through metric, how much revenue visibility into POS and which brands performed ahead/behind?

A: They have visibility into ~60% of revenue from largest retailers and direct-to-consumer. Outdoor lifestyle has done very well; within shooting sports, Caldwell (with new products like Claycopter) has been off the charts while others aligned with NICS trends with some softness.

Q: Disconnect between November performance (up 13% in outdoor lifestyle) and Q3 guide (down 8%)?

A: Demand is choppy; retailers managing lower inventory levels and allocating capital differently based on seasonality and consumer cohorts. POS is strong, but it's about retailer ordering patterns and capital allocation.

Q: Mitigating softness from large e-commerce customer?

A: Direct-to-consumer business has grown, and traditional retailers' omnichannel share is increasing, which will reduce volatility over time. The large e-commerce retailer's up-and-down nature is part of the current environment.

Q: Tariff mitigation timeline and impact on P&L?

A: Tariffs started being capitalized in March, amortization starts in December. Mitigation efforts with pricing and cost concessions will fully offset tariff impact by fiscal 2027.

Q: Sales vs POS gap and when they might align?

A: Retailers are navigating consumer pressure and allocating capital based on cohorts; it's a complex mix of factors, but the window is narrowing as tariffs stay and retailers adjust.

Q: New products and M&A update?

A: Strong product pipeline with focus on building ecosystems around growth brands; M&A landscape ice is beginning to break with some opportunities emerging, watching for divestitures and new assets.