American Outdoor 2026 Q2 Earnings Earnings Decline 33.3% Amid Revenue Drop

American Outdoor Brands (AOUT) reported fiscal 2026 Q2 results on Dec 9, 2025, with both revenue and earnings falling below prior-year levels. The company’s net income dropped 33.3% to $2.08 million, and guidance for 2026 was adjusted downward due to macroeconomic challenges and inventory management efforts.

Revenue

American Outdoor’s total revenue for 2026 Q2 declined 5.0% year-over-year to $57.20 million, reflecting a contraction in the e-commerce channel. While traditional channel sales held at $36.78 million, the e-commerce segment saw a 15.9% decline to $20.42 million, attributed to a major online partner’s adjustments. Despite these headwinds, new product innovation drove 31% of total net sales, highlighting the company’s focus on growth through innovation.

Earnings/Net Income

Earnings per share (EPS) fell 33.3% to $0.16 in 2026 Q2, compared to $0.24 in 2025 Q2. Net income followed a similar trajectory, dropping to $2.08 million from $3.11 million. The significant decline underscores the challenges posed by inventory management and macroeconomic pressures, despite strong pull-through sales at retail. The EPS performance indicates a material deterioration in profitability relative to the prior year.

Price Action

The stock price of American Outdoor surged 6.65% on the latest trading day, with a 12.41% weekly gain and a 16.67% monthly rise, reflecting investor optimism about post-earnings guidance and strategic initiatives.

Post-Earnings Price Action Review

The strategy of buying American Outdoor shares after revenue growth in the previous quarter and holding for 30 days underperformed significantly. Over three years, this approach yielded a CAGR of -8.22%, with a Sharpe ratio of -0.16, indicating high risk and negative returns. The strategy’s excess return was -90.21%, far below the benchmark’s 67.70%. This underperformance highlights the risks of relying solely on short-term revenue growth as a buying signal.

CEO Commentary

Brian Murphy, CEO, emphasized the company’s resilience, noting a 4% year-over-year pull-through POS growth and the role of new products in driving sales. He acknowledged e-commerce challenges but highlighted omnichannel gains and strategic expansion into new outdoor categories. Murphy expressed cautious optimism, stating, “We’re confident our agility will enable us to deliver durable, long-term value for our shareholders.”

Guidance

CFO Andy Fulmer outlined a revised 2026 outlook, with full-year net sales expected to decline 13%-14% YoY, excluding $10 million in prior-year order acceleration. Q3 sales are projected to fall ~8% YoY, while adjusted EBITDA is forecast at 4%-4.5% of sales. Gross margin is expected to stabilize at 42%-43% for FY2026, with tariff mitigation anticipated to offset impacts by FY2027.

Additional News

Within three weeks of the earnings report, American Outdoor announced a $10 million share buyback program, signaling confidence in its stock’s value. Additionally, CEO Brian Murphy purchased $22,000 in shares, reinforcing management’s alignment with shareholder interests. The company also repurchased 74,000 shares for $662,000 in Q2, further demonstrating a commitment to capital efficiency. These moves, combined with inventory reduction plans, highlight strategic efforts to enhance shareholder value amid a challenging market environment.