Clarus Corp. trimmed its outlook for the year after reporting second-quarter results fell below analyst expectations due to promotional pressure and prolonged inventory de-stocking. Sales were down 27 percent, sliding 24 percent at Black Diamond, 27 percent at the Sierra/Barnes ammunition segment and 34 percent at its Adventure segment (Rhino-Rack, Maxtrax).

Adjusted EPS of 11 cents compared with analysts’ consensus target of 13 cents. Sales of $83.7 million were short of the consensus target of $92 million.

Second Quarter Highlights

  • Sales of $83.7 million compared to $114.9 million;
  • Gross margin of 36.7 percent compared to 38.0 percent;
  • Net loss of $2.1 million, or $(0.06) per diluted share, compared to net income of $3.8 million, or $0.09 per diluted share;
  • Adjusted net income before non‐cash items of $4.2 million, or $0.11 per diluted share, compared to $13.1 million, or $0.33 per diluted share; and
  • Adjusted EBITDA of $7.3 million with an adjusted EBITDA margin of 8.7 percent compared to $17.6 million with an adjusted EBITDA margin of 15.3 percent.

“Our second quarter results were impacted by the continued challenging macroeconomic environment and related headwinds,” said Warren Kanders, Clarus’ executive chairman. “Specifically, a more promotional retail environment and inventory de-stocking headwinds impacted our sales velocity and our ability to protect margins. Despite these challenging market conditions, each segment generated positive free cash flow during the second quarter.

“Looking ahead, we will continue to focus on stabilizing revenue, gross margin and EBITDA, while implementing certain cost-out strategies as we prioritize our growth objectives and seek to drive shareholder value through cash flow generation and debt paydown.”

2023 Outlook
The company now expects fiscal year 2023 sales of $385 million to $400 million (approximately $420 million previously) and adjusted EBITDA of $42 million to $50 million (approximately $60 million previously). In addition, capital expenditures are now expected to range between $6.5 million to $7.5 million (between $7 million to  $8 million previously) and free cash flow is now expected to range between $30 million to $35 million ($35 million to $40 million previously) for the full year 2023.

For full details on the details for the Black Diamond brand for the second quarter, including executive commentary from the analyst conference call, plus more details on other Clarus brands, go here:

EXEC: Black Diamond Sales Thwarted By Weak Open-To-Buy Orders

Photo courtesy Black Diamond