ESCALADE INC Q1 FY2026 earnings call

• Delivered solid start to 2026 with leaner foundation and improved operating model. • Net sales growth driven by Gold Tip Archery, billiards, and safety; offset by softer outdoor and indoor games. • Gross margins expanded due to cost management, productivity, and favorable mix. • Made progress in asset utilization with inventory decline. • Focus on strategic accretive acquisitions and enhanced capital investments for growth. • Introduced new products across archery, indoor and outdoor games categories.

Net sales increased slightly in the first quarter. Growth was driven by Gold Tip Archery acquisition and strength in billiards and safety categories, partially offset by softer demand in outdoor and indoor games. Gross margins expanded by approximately 400 basis points to 30.7% due to cost management, productivity initiatives, and favorable mix. Total inventory declined 3.4 million year over year in first quarter.

• Expect gross margins above prior year levels driven by improved operating model and cost management. • Capital spending likely higher in 2026 compared to last year due to strategic investments. • Focus on strategic accretive acquisitions and enhancing product innovation pipeline.

• Potential headwinds from inflationary pressures like high energy costs affecting consumer demand and creating cost pressure. • Macroeconomic and geopolitical conditions could keep consumer demand uneven. • Monitoring emerging tariff policy changes and prepared to adjust as market conditions evolve.

Q: Breakdown of gross sales by channel with dip in mass merchants and rise in specialty dealers.

A: Specialty dealer growth driven by Gold Tip Archery acquisition; mass merchant dip due to no repeat sales with target.

Q: Trend of people not traveling like 2020, category strength.

A: Staycation leads to strength in table tennis, indoor/outdoor games, billiards.

Q: Retailers prepared for possible change in demand.

A: Retail partners leaning into categories with good order uptake and forecasting.