Clarus Corp. is reporting that its board of directors had initiated a review of strategic alternatives, including a sale of all or part of the business. The move comes as the parent of Black Diamond and of several vehicle-based outdoor and overlanding brands reduced its guidance for the year while reporting first-quarter results.

In a statement, Clarus said the financial review “includes a range of potential strategic alternatives, including, among other things, the sale of all or part of the business or other strategic or financial transactions involving the company.” Jefferies LLC has been retained as a financial advisor.

Clarus said the review has no deadline or definitive timetable and no assurances were offered that the review will result in any transaction or other strategic outcome. The company does not intend to disclose further developments regarding on the review unless and until it determines that further disclosure is appropriate or required.

The reduced 2026 guidance comes despite Clarus showing some improvement in the first quarter across both its Outdoor segment, consisting of Black Diamond, and Aventure segment, including Rhino-Rack, Maxtrax, Tred Outdoors, and RockyMounts, as well as in overall profitability.

First Quarter 2026 Financial Results
On a consolidated basis, sales in the first quarter were $61.9 million compared to $60.4 million in the same year‐ago quarter, up 2.5 percent. Sales in the Outdoor segment increased 1.2 percent to $44.9 million, compared to $44.3 million in the year-ago quarter. Sales in the Adventure segment increased 5.9 percent to $17.1 million, compared to $16.1 million in the year-ago quarter.

Sales in the Adventure segment increased due to a favorable wholesale market in Australia for Rhino-Rack and MAXTRAX, partially offset by decreases in North America. Sales in the Outdoor segment increased due to greater global wholesale and independent global distributor revenues. This increase was partially offset by lower PIEPS revenue due to its sale last July and lower global direct-to-consumer revenue.

Gross margin in the first quarter was 36.8 percent compared to 34.4 percent in the year‐ago quarter. The gross margin increase was primarily attributable to higher volumes and a favorable product mix at both the Adventure and Outdoor segments.

Selling, general and administrative expenses in the first quarter were $26.6 million compared to $26.6 million in the same year‐ago quarter. First quarter 2026 expenses reflect lower wages, marketing costs and other expense reduction initiatives across both segments to manage costs and the removal of PIEPS due to its sale during 2025, partially offset by higher outside services and depreciation.

Net loss in the first quarter of 2026 was $3.3 million with a net loss margin of 5.3 percent, or 9 cents a share, compared to net loss of $5.2 million with a net loss margin of 8.7 percent, or 14 cents, in the year-ago quarter.

Adjusted net income in the first quarter of 2026 was $0.7 million, or 2 cents per diluted share, compared to adjusted net loss of $1.2 million, or 3 cents per share, in the year-ago quarter. Adjusted net income (loss) excludes amortization of intangibles, disposal of internally developed software, restructuring charges, transaction costs, inventory fair value adjustment from purchase accounting, and stock-based compensation.

Adjusted EBITDA in the first quarter was negative $1.1 million, or an adjusted EBITDA margin of negative 1.8 percent, compared to adjusted EBITDA of negative $1.4 million, or a negative adjusted EBITDA margin of 2.3 percent, in the same year‐ago quarter.

Net cash used in operating activities for the three months ended March 31, 2026, was $(4.1) million compared to net cash used in operating activities of $(2.1) million in the prior year quarter. Capital expenditures in the first quarter of 2026 were $1.6 million compared to $1.2 million in the prior year quarter. Free cash flow for the first quarter of 2026 was $(5.7) million compared to $(3.3) million in the prior year quarter.

Management Commentary
“During the first quarter, we advanced key initiatives and delivered improved revenue and adjusted EBITDA year-over-year,” said Warren Kanders, executive chairman, Clarus. “While geopolitical and macro factors continue to cause uncertainty and disruption, we remain focused on operational execution and simplification aligned with our strategic roadmap. Our Outdoor business continued to perform well despite challenging market conditions, with segment topline and earnings up versus last year’s first quarter, reflecting the steps we have taken to enhance inventory quality, prioritize our most profitable categories, and steadily shift toward a more premium, full-price business model. Importantly, our apparel category continues to show strength, delivering sales growth for the fourth consecutive quarter.

“At Adventure, we delivered solid first quarter results, highlighted by increased revenue and gross profit. Revenue grew 5.9 percent and gross margin increased 260 basis points compared to the prior year, with margin expansion driven by price growth, customer mix, and reduced incentives. The near-term outlook for Adventure remains challenging due to geopolitical and macro factors, including a difficult consumer environment in Australia. Over the long term, we continue to believe the Adventure segment will benefit from the structural improvements we have made over the last several quarters, with profitability recovering as new products launch and demand normalizes.”

Kanders continued, “Overall, we believe the sum of the parts of our two segments, Outdoor and Adventure, exceeds the company’s current market valuation, and we are committed to seeking to maximize long-term value for our shareholders. As such, the Board has initiated, in conjunction with our management team, a review of strategic alternatives designed to enhance shareholder value. We are undertaking this process from a position of strength, supported by a debt-free balance sheet and significant liquidity.”

Liquidity at March 31, 2026 vs. December 31, 2025

  • Cash and cash equivalents totaled $29.8 million compared to $36.7 million.
  • The balance sheet was debt free at the end of both periods.

2026 Outlook
The company is revising its fiscal year 2026 outlook and now expects sales to range between $245 million and $255 million, compared to its prior outlook of $255 million to $265 million, and adjusted EBITDA to range between approximately $3 million and $5 million, compared to its prior outlook of $9 million to $11 million. The revised adjusted EBITDA guidance now includes an expected decline in our Adventure Segment in Australia and approximately $3 million of legal and regulatory expense for the remainder of 2026.

At the midpoint of the revised revenue and adjusted EBITDA outlook, adjusted EBITDA margin is expected to be 1.6 percent. Capital expenditures are expected to remain between $6 million and $7 million, consistent with the company’s prior outlook, and free cash flow is now expected to be flat for the full year 2026, compared to the company’s prior outlook of $3 million to $4 million. For the second quarter of 2026, sales are expected to range between $51 million and $53 million, and adjusted EBITDA is expected to be approximately a $3 million loss. 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, we do not provide reconciliations of adjusted EBITDA and/or adjusted EBITDA margin guidance to net income guidance for fiscal year 2026.

Image courtesy Black Diamond