Clarus Corporation, the owner of the Black Diamond, Rhino-Rack, Maxtrax, Tred Outdoors, and RockyMounts brands, reported  sales in the 2025 fourth quarter were $65.4 million, compared to $71.4 million in the prior-year Q4 period.

Outdoor segment sales decreased 8 percent to $47.2 million, compared to $51.1 million in the same year-ago quarter. The decrease in Outdoor sales was reportedly due to softness in North America Wholesale, lower global DTC (direct-to-consumer) revenues, and lower PIEPS revenue due to its sale in July 2025, partially offset by an increase in IGD and Europe Wholesale revenue. IGD and Europe Wholesale sales in the Outdoor segment were up $1.4 million, or 9 percent year-over-year (y/y).

Apparel globally was up 10 percent y/y in the fourth quarter.

Adventure segment sales decreased 10 percent y/y to $18.2 million, compared to $20.3 million in the prior-year quarter. Adventure segment reflects significantly reduced demand from global OEM customers and a challenging wholesale market in Australia for Rhino-Rack, partially offset by increased contributions from the acquisition of RockyMounts. RockyMounts contributed $1.0 million in incremental sales growth compared to the prior year period.

Region Summary
(In thousands, except per share amounts)

Profitability & Expenses Summary
Gross margin in the fourth quarter was 27.7 percent of net sales, compared to 33.4 percent in the 2024 fourth quarter. The decrease in gross margin was said to be primarily due to higher inventory reserves within the Adventure segment to address slow-moving and obsolete inventory, tariff impacts at both segments, lower volumes at the Outdoor segment due to the sale of PIEPS, and unfavorable foreign currency impacts at the Outdoor segment. These decreases were partially offset by a favorable product mix and lower PFAS inventory reserves at the Outdoor segment. Adjusted gross margin, reflecting the PFAS related and other inventory reserves and inventory fair value adjustments as a result of purchase accounting, was 33.6 percent for the quarter compared to 38.0% in the year-ago quarter.

Selling, general and administrative expenses in the fourth quarter were $25.5 million compared to $27.8 million in the prior-year quarter. The decrease was said to be primarily due to lower employee-related expenses, lower costs from PIEPS due to its sale, as well as expense reduction initiatives across both segments and at Corporate to manage costs.

During the fourth quarter of 2025, the company incurred non-cash impairment charges for goodwill and indefinite-lived assets of $29.9 million. During the fourth quarter of 2024, the company incurred non-cash impairment charges for goodwill and indefinite-lived assets of $44.8 million as well as an increase in tax expense of $21.0 million for a valuation allowance to fully reserve all deferred tax assets associated with U.S. federal income taxes.

The loss from continuing operations in the fourth quarter of 2025 was $31.3 million, or a loss of 81 cents per diluted share, compared to a loss from continuing operations of $73.3 million, or a loss of $1.92 per diluted share in the 2024 quarter. Loss from continuing operations in the fourth quarter included a non-cash impairment charge for goodwill and indefinite-lived intangible assets of $29.9 million in the Adventure segment due to the sustained decline in the company’s stock price and lower sales and profitability in the segment compared to expectations. The loss also includes $9.3 million of costs and charges associated with amortization of intangibles, restructuring charges, transactions costs, disposal of internally developed software, PFAS and other inventory reserves, legal costs and regulatory matter expenses, and stock-based compensation.

Adjusted net income in the fourth quarter of 2025 was $3.6 million, or 9 cents per diluted share, compared to an Adjusted net loss of $3.2 million, or a loss of  8 cents per diluted share, in the 2024 fourth quarter. Adjusted net loss excludes legal costs and regulatory matters expenses, restructuring charges and transaction costs, as well as non-cash items for intangible amortization, impairment of goodwill and indefinite-lived intangible assets, disposal of internally developed software, inventory fair value of purchase accounting, PFAS and other inventory reserves, deferred tax valuation allowance, and stock-based compensation.

Adjusted EBITDA in the fourth quarter was $1.2 million, or an Adjusted EBITDA margin of 1.8 percent of net sales, compared to Adjusted EBITDA of $4.4 million, or an Adjusted EBITDA margin of 6.1 percent, in the prior-year quarter.

Net cash provided by operating activities for the three months ended December 31, 2025, was $12.5 million compared to net cash provided of $16.6 million in the prior-year quarter.

Capital expenditures (CapEx) in the fourth quarter were $0.9 million compared to $2.2 million in the prior-year quarter.

Free cash flow for the fourth quarter of 2025 was $11.6 million.

“We took decisive actions in 2025 to sharpen our focus and position Clarus for category-specific growth and greater profitability,” said Warren Kanders, executive chairman, Clarus Corporation. “We advanced our strategic roadmap throughout the year by refining our organizational structure, optimizing our product portfolio, and strengthening our go-to-market approach.   In the Outdoor segment, we achieved consecutive quarters of improved performance driven by prioritizing Black Diamond’s highest-performing and most profitable styles, positioning the business for sustained profitability and operating margin expansion. Apparel continued to be a key growth driver, delivering another quarter of double-digit sales growth in Q4.   In the Adventure segment, despite experiencing lower OEM demand and customer transitions, we took steps to enhance our leadership position in Australia. We saw new customer wins and sell-in in Australia and Europe, which we believe will lay the groundwork for improved performance going forward.”

2025 Financial Summary vs. 2024
Sales were $250.4 million in 2025, compared to $264.3 million in 2024.

  • Gross margin was 33.1 percent of net sales in 2025, compared to 35.0 percent in 2024; Adjusted gross margin was 34.9 percent in 2025 compared to 37.5 percent in 2024.
  • Net loss of $46.6 million, or a loss of $1.21 per diluted share1, compared to net loss (including the impact of discontinued operations) of $52.3 million, or a loss of $1.37 per diluted share3.
  • Loss from continuing operations amounted to $46.6 million, or $1.21 per diluted share, in 2025, compared to a loss from continuing operations of $88.4 million, or a loss of $2.31 per diluted share, in 2024.
  • Adjusted income from continuing operations of $3.7 million, or 10 cents per diluted share, compared to Adjusted loss from continuing operations of $2.6 million, or a loss of 7 cents per diluted share.
  • Adjusted EBITDA was $1.1 million in 2025 with an Adjusted EBITDA margin of 0.4 percent of sales, compared to $6.9 million with an adjusted EBITDA margin of 2.6 percent in full-year 2024.
1 Includes $29.9 million and $31.4 million impairment of goodwill and indefinite-lived intangible assets for the fourth quarter and full year ended December 31, 2025, respectively.
2 Includes $44.8 million impairment of goodwill and indefinite-lived intangible assets as well as a $21.0 million tax expense for the establishment of a valuation allowance associated with deferred tax assets for the fourth quarter ended December 31, 2024.
3 Includes a gain on the sale of the Precision Sport segment of $40.6 million as well as $44.8 million impairment of goodwill and indefinite-lived intangible assets as well as a $21.0 million tax expense for the establishment of a valuation allowance associated with deferred tax assets for the full year ended December 31, 2024.

Net cash used in operating activities for the year ended December 31, 2025, was $4.7 million compared to net cash used in operating activities of $7.3 million in 2024. Capital expenditures in 2025 were $5.2 million compared to $6.7 million in the prior year. Free cash flow for the year ended December 31, 2025, was an outflow of $9.9 million compared to an outflow of $14.0 million in the same year‐ago period.

Balance Sheet Summary

  • Cash and cash equivalents totaled $36.7 million at year-end, compared to $45.4 million at 2024 year-end.
  • The company had zero debt at year-end compared to $1.9 million at 2024 year-end.

Kanders added, “As we look to 2026, we expect ongoing volatility in the global consumer environment, but the company is significantly better positioned than this time last year. Following a multi-year transformation, the Black Diamond organization is leaner, more focused, and more competitive, and we expect our strategic initiatives to drive improved profitability. At Adventure, we are balancing growth and operational execution while advancing a robust pipeline of innovative products, with multiple new platforms expected to launch over the next 18 months. With a debt-free balance sheet and strong liquidity, we remain focused on executing our long-term growth strategy, disciplined capital allocation, and maximizing shareholder value.”

2026 Outlook
The company expects fiscal year 2026 sales to range between $255 million and $265 million.

Adjusted EBITDA to range between approximately $9 million and $11 million, or an Adjusted EBITDA margin of 3.8 percent at the mid-point of revenue and Adjusted EBITDA.

CapEx are expected to range between $6 million and $7 million and free cash flow is expected to range between $3 and $4 million for the full year 2026.

Clarus has not provided net income guidance due to the inherent difficulty of forecasting certain types of expenses and gains, which affect net income but not Adjusted EBITDA and/or Adjusted EBITDA Margin. Therefore, the company did not provide a reconciliation of Adjusted EBITDA and/or Adjusted EBITDA Margin guidance to net income guidance for fiscal year 2026.

Net Operating Loss (NOL) and Deferred Tax Asset Valuation Allowance
As of December 31, 2025, the Company had net operating loss carryforwards (NOLs) and research and experimentation credit for U.S. federal income tax purposes of $41.2 million and $5.7 million, respectively. All federal NOLs will have an indefinite carryforward period. Federal research and experimentation credits have a limited carryforward period and will begin to expire in tax year 2033.

Image courtesy Black Diamond