American Outdoor 2026 Q2 Earnings Net Income Drops 33.3%

American Outdoor Brands (AOUT) reported fiscal 2026 Q2 results on Dec 9, 2025, with revenue declining 5.0% to $57.20 million. The company beat revenue estimates but noted a significant drop in net income, while CEO Brian Murphy highlighted innovation and retail partnerships as growth drivers.

Revenue

Total revenue fell to $57.20 million in Q2 2026, a 5.0% decline from $60.23 million in the prior-year period. E-commerce channel net sales contracted 15.9% to $20.42 million, attributed to reduced sales from a large online partner. Meanwhile, traditional channel net sales held at $36.78 million, offsetting some of the e-commerce decline. Combined, these segments underscored a mixed performance, with innovation and omnichannel strategies tempering softer online demand.

Earnings/Net Income

Earnings per share (EPS) plummeted 33.3% to $0.16 in Q2 2026 from $0.24 in Q2 2025, while net income dropped to $2.08 million from $3.11 million. The sharp decline reflects margin pressures and higher costs, marking a challenging quarter for profitability. This represents a significant underperformance relative to the company’s prior-year results.

Post-Earnings Price Action Review

The strategy of buying American Outdoor shares after revenue growth in Q2 and holding for 30 days has historically underperformed, with a compound annual growth rate (CAGR) of -8.22% over three years. The approach exhibited a Sharpe ratio of -0.16, indicating high risk and negative returns, alongside a maximum drawdown of 0.00%. The strategy’s excess return of -90.21% starkly contrasted with the benchmark’s 67.70% gain, underscoring its poor efficacy.

CEO Commentary

Brian Murphy emphasized the company’s resilience, noting 4% year-over-year point-of-sale (POS) growth at major retailers and a robust innovation pipeline. He highlighted the Caldwell Clay Copter Surface-to-Air Launcher as a flagship product, while acknowledging e-commerce challenges. Murphy expressed confidence in navigating macroeconomic headwinds through agility and strategic innovation.

Guidance

CFO Andy Fulmer outlined expectations for Q3 2026: net sales to decline ~8% YoY, with full-year net sales down 13%-14% (excluding prior-year order acceleration, ~5%). Gross margin is projected at 42%-43%, pressured by tariff amortization, while adjusted EBITDA is expected to range between 4%-4.5% of net sales. The company also plans $4-$4.5 million in capital expenditures and a $10 million share repurchase program.

Additional News

In the three weeks preceding the earnings release, American Outdoor announced a $10 million share buyback program, signaling confidence in its stock valuation. Additionally, CEO Brian Murphy purchased $22,000 in shares, demonstrating insider support. The company also unveiled the Caldwell Clay Copter Surface-to-Air Launcher, a key innovation expected to drive future sales. These moves align with its strategy to strengthen market position through capital efficiency and product innovation.