American Outdoor 2026 Q2 Earnings Net Income Drops 33.3% as Revenue Falls 5%

American Outdoor Brands (AOUT) reported mixed second-quarter fiscal 2026 results on Dec. 9, 2025. While revenue of $57.2 million exceeded Zacks estimates by 12.82%, earnings declined sharply, and full-year guidance signaled a 13%-14% sales drop.

Revenue

E-commerce channel net sales totaled $20.42 million, while traditional channel net sales reached $36.78 million, resulting in total net sales of $57.20 million. This marked a 5.0% year-over-year decline from $60.23 million in 2025 Q2.

Earnings/Net Income

The company’s GAAP EPS fell 33.3% to $0.16, compared to $0.24 in 2025 Q2, while net income dropped to $2.08 million, a 33.3% decrease from $3.11 million. Non-GAAP EPS of $0.29, though below the $0.30 forecast, outperformed revenue expectations. The sharp earnings contraction reflects ongoing retail challenges and margin pressures.

Post-Earnings Price Action Review

The strategy of buying AOUT shares after the earnings report and holding for 30 days yielded a -22.51% return, underperforming the 67.70% benchmark. With a CAGR of -8.22%, maximum drawdown of 0.00%, and Sharpe ratio of -0.16, the approach highlighted a high-risk, low-reward profile.

CEO Commentary

CEO Brian Murphy emphasized strong product pull-through at retailers, with 4% year-over-year POS growth. Innovation drove 31% of net sales, but e-commerce faced a 15.9% decline due to reduced online-only partner sales. Murphy balanced optimism about brand strength with caution over macroeconomic uncertainty.

Guidance

CFO Andy Fulmer projected full-year 2026 net sales to decline 13%-14% (excluding $10 million accelerated orders), with Q3 sales down ~8%. Gross margin is expected to stabilize at 42%-43%, while Adjusted EBITDA will remain at 4%-4.5% of sales.

Additional News

1. Share Buyback Program: AOUT announced a $10 million stock repurchase plan, reflecting leadership’s confidence in undervalued shares.

2. CEO Optimism: Murphy highlighted 31% net sales from new products and expanded distribution through a major mass-market retailer.

3. Institutional Interest: Bank of America and JPMorgan significantly increased stakes in Q2, signaling institutional confidence despite the stock’s 52.8% YTD decline.

Guidance

Andy Fulmer, CFO, provided full-year FY2026 guidance: net sales down 13%-14% year-over-year (excluding $10M accelerated orders, ~5% decline), Q3 net sales down ~8%, gross margin of 42%-43% (due to tariff amortization), and Adjusted EBITDA of 4%-4.5% of sales. Tariff mitigation efforts, including pricing, cost concessions, and product design, are expected to offset impacts by FY2027. Inventory levels target $115M by year-end, with CapEx of $4-$4.5M. Operating expenses are forecasted to decline in Q3 and FY2026, with long-term EBITDA goals of 25%-30% on sales above $200M.