Clarus Corp. posted an operating loss as a continued slowdown in the OEM channel led to a significant sales drop in its Adventure segment, and ongoing SKU rationalization led to a smaller decline at Black Diamond.

Clarus also withdrew its guidance for the year due to tariff uncertainty, hired Thule’s former sales chief to lead its Adventure segment and reached an agreement to sell its PIEPS avalanche protection brand.

Management Commentary
“Against an increasingly challenging consumer backdrop across the outdoor market, we continued to execute in line with our strategic roadmap in the first quarter, strengthening the core of our Outdoor segment and investing to scale our Adventure segment,” said Warren Kanders, Clarus’ executive chairman. “We have maintained momentum at Outdoor, with our team focused on prioritizing our best and most profitable styles. Importantly, Black Diamond remains an iconic brand within core mountain and climb categories, and we’ve been pleased with the strong feedback from our partners regarding our revamped apparel line. At Adventure, the slowdown in both our OEM business and the core Australian wholesale market contributed to lower Q1 sales, but investments in innovation are expected to enhance new product introductions in the second half of the year.”

Kanders continued, “While our results to date have met topline expectations, the forward outlook remains highly unpredictable, and given the macroeconomic uncertainty, we believe it is prudent to withdraw our full-year guidance. In light of the challenges posed by tariffs and potential consequences on consumer demand, our focus is on controlling what we can. The Black Diamond organization is healthier than ever, and the hard work of the prior two years to simplify the business and right-size our inventory has positioned us to better withstand market headwinds in the near term. We have made operational and organizational progress to start the year at Adventure, although conditions for this business remain challenging. We expect that our investments in new product development initiatives and enhanced fits will ultimately drive accelerated brand penetration globally.”

First Quarter 2025 Financial Results

  • On a consolidated basis, sales in the first quarter were $60.4 million compared to $69.3 million in the same year‐ago quarter, down 12.8 percent.
  • Sales in the Outdoor segment decreased 6 percent to $44.3 million, compared to $47.0 million in the year-ago quarter. Sales in the outdoor segment decreased due to continued efforts around product simplification and SKU rationalization strategy, combined with the impact of the shift of IGD (independent global distributor) revenues out of the first quarter. This decrease was partially offset by increased revenue from the company’s high-margin “A” and “B“ products at Black Diamond.
  • Sales in the Adventure segment decreased 28 percent to $16.1 million, compared to $22.3 million in the year-ago quarter. Sales in the Adventure segment decreased due to significantly lower demand from global OEM customers and a challenging wholesale market in Australia for both Rhino-Rack and Maxtrax, combined with a prior year large wholesale customer in North America not recurring in 2025, which was partially offset by $1.3 million of sales from the recent acquisition of RockyMounts.
  • Gross margin in the first quarter was 34.4 percent compared to 35.9 percent in the year‐ago quarter. The gross margin decrease was primarily attributable to lower volumes and unfavorable product mix at the Outdoor and Adventure segments. Specifically, the unfavorable product mix at Outdoor was related to high levels of discontinued merchandise the company sold during the quarter, including the vast majority of the remaining PFAS inventory. Promotional sales efforts in North America primarily drove the unfavorable product mix at Adventure, combined with lower wholesale volume at both Rhino-Rack and Maxtrax in Australia, which drove the decline in gross margin compared to the same year-ago quarter. Adjusted gross margin reflecting inventory fair value adjustments because of purchase accounting was 34.6 percent compared to 36.9 percent in the year-ago quarter.
  • Selling, general and administrative expenses in the first quarter were $26.6 million compared to $28.2 million in the same year‐ago quarter. The decrease was primarily a result of lower wages and marketing costs, as well as lower retail expenses at Outdoor due to store closures and other expense reduction initiatives across both segments to manage costs.
  • The loss from continuing operations in the first quarter of 2025 was $5.2 million, or $(0.14) per diluted share, compared to loss from continuing operations of $6.5 million, or $(0.17) per diluted share in the year-ago quarter. Loss from continuing operations in the first quarter includes $5.1 million of costs and charges associated with amortization of intangibles, disposal of internally developed software, restructuring charges, transactions costs, inventory fair value adjustment from purchase accounting, legal costs, regulatory matter expenses, and stock-based compensation.
  • Adjusted loss from continuing operations in the first quarter of 2025 was $(0.7) million, or $(0.02) per diluted share, compared to adjusted loss from continuing operations of $(0.1) million, or $(0.00) per diluted share, in the year-ago quarter. Adjusted loss from continuing operations excludes amortization of intangibles, disposal of internally developed software, restructuring charges, transactions costs, inventory fair value adjustment from purchase accounting, legal costs and regulatory matter expenses, and stock-based compensation.
  • Adjusted EBITDA from continuing operations in the first quarter was $(0.8) million, or an adjusted EBITDA margin of (1.3) percent, compared to adjusted EBITDA from continuing operations of $2.0 million, or an adjusted EBITDA margin of 2.9 percent, in the same year‐ago quarter.
  • Net cash used in operating activities for the three months ended March 31, 2025, was $(2.1) million compared to net cash used in operating activities of $(16.4) million in the prior year quarter. Capital expenditures in the first quarter of 2025 were $1.2 million compared to $1.9 million in the prior year quarter. Free cash flow for the first quarter of 2025 was $(3.3) million compared to $(18.3) million in the prior year quarter.

Liquidity at March 31, 2025 vs. December 31, 2024

  • Cash and cash equivalents totaled $41.3 million compared to $45.4 million.
  • Total debt of $1.9 million, related to the RockyMounts acquisition, compared to $1.9 million.

New Leader Appointed at Adventure
The company announced that it had appointed Tripp Wyckoff as managing director of Clarus’ Adventure segment, effective immediately, replacing Mathew Hayward, who will depart the company, effective June 30, 2025, to pursue other professional opportunities.

Wykoff joined the company in July 2024 and has served as general manager of the Americas, responsible for the company’s Adventure brands in the U.S., Canada and Latin America.

Wyckoff has over 20 years of operating experience in senior leadership roles, including as president of Vertical Supply Group (VSG), a branded arborist equipment provider and distributor. He led VSG for over nine years, reportedly “growing earnings by 5x, integrating 11 acquisitions and stewarding the business through two private equity transactions.” Before VSG, Wyckoff spent eight years at Thule as VP of sales, marketing and service, where he grew the brand “significantly in the U.S.” and was primarily responsible for bringing global initiatives to market, building one-on-one customer relationships and integrating key acquisitions. While at Thule, he guided multi-channel, go-to-market strategy development and execution, and “co-developed and implemented a value-added sales training program for the company’s global sales team.”

Kanders commented, “We are excited to promote leadership from within and appoint Tripp Wyckoff to head the Adventure Segment moving forward. Since joining Clarus last year, Tripp has helped drive critical progress in the U.S. organization and demonstrated the business-building skills necessary for Adventure to reach its fullest potential. A highly experienced leader, he has a wealth of knowledge, operating discipline and expertise in taking brands of our size to the next level. He previously led a private equity-backed business through multiple growth cycles and exits, with deep industry experience through various leadership roles at Thule. With the full support of the board, senior management, and the Adventure team, I firmly believe Tripp is the right leader to execute the next phase of the Adventure growth strategy, as we continue to see an attractive long-term opportunity underpinned by a large and growing addressable market across multiple verticals. We thank Mat Hayward for his important contributions during his tenure, which included establishing an entirely new product development and product commercialization process that will continue to guide us, and wish him all the best in his future endeavors.”

Agreement to Sell PIEPS
Following a comprehensive strategic review process launched in Fall 2024, the company agreed to sell PIEPS and assets of the JetForce avalanche pack intellectual property to a private investment firm for a total purchase price of €7.8 million, including cash and debt. The parties have executed the agreement governing the sale, and it will become binding upon receipt by the Notary in Austria of the original of the signed Power of Attorney of the purchaser, a copy of which was provided to the Notary. This divestiture aligns with Clarus’ prioritization of “simplifying the business and rationalizing our product categories. We expect the transaction to close before the end of the third quarter of 2025 subject to customary closing conditions and other regulatory matters, including foreign direct investment requirements.”

2025 Outlook
Due to the ongoing macroeconomic uncertainty stemming from U.S. global trade policies, including the impact of recently imposed or proposed tariffs and the resulting potential consequences on consumer demand, the company withdrew its previously issued full-year 2025 revenue, adjusted EBITDA, capital expenditures, and free cash flow guidance. It intends to provide updated guidance once visibility improves.

Image courtesy Black Diamond