America Outdoor Brands (AOB) President and CEO Brian Murphy told analysts on a Thursday, June 25, conference call that reported net sales declined during fiscal 2026, but the underlying performance of the company’s business was much stronger than the reported results suggest. 

He explained that a meaningful portion of the year-over-year decline was attributable to approximately $10 million in orders that retailers accelerated into the final two weeks of fiscal 2025 (ended April 30, 2025), reminding the participants that the acceleration of orders into Q4 2025 from Q1 2026 (the Acceleration) was not only a bid by retailers to get ahead of impending tariffs, but it was also a tremendous endorsement of the company’s most popular and innovative brands. 

“Nevertheless, that acceleration created a tough comp for our fourth quarter and full year that we believe is masking excellent performance across our business,” he said. 

Fourth quarter net sales for the period ended April 30, 2026, were reported down 24.0 percent year-over-year (y/y) to $47.1 million. The adjustment for the Acceleration resulted in an Adjusted net sales decrease of 9.2 percent y/y in fiscal Q4, the decline driven almost entirely by the weakness in aiming solutions. 

While the full-year top-line number was reported down 14.3 percent y/y to $190.5 million, Murphy noted that excluding that negative impact on the fiscal 2026 Q1 period, full-year net sales declined just 5.4 percent, suggesting it was “a solid result given the environment.” 

Murphy continued. “We view the 5 percent decline as nominal and driven by two elements that were persistent throughout the year. The first is an inventory reset at our largest e-com retailer, and the second is extended softness in the aiming solutions category within the personal protection market. Despite those impacts, our key brands continue to perform,” he said. 

“In a year shaped by tariff uncertainty, uneven retailer ordering patterns and continued pressure across portions of the consumer marketplace, our team remained focused on innovation, execution and serving our consumers and retail partners,” offered Murphy. “As a result, we continue to strengthen our brands, expand distribution of our products, optimize our portfolio and position the company for future growth in fiscal 2027 and beyond. With that, let’s take a look at the year. 

In a broader stable of brands, AOB defines its key growth brands as BOG, Bubba, Caldwell, Grilla and Meat! Your Maker. “On a combined basis and again, adjusting for the Acceleration, this group delivered positive year-over-year net sales growth as well as positive POS growth for fiscal 2026,” Murphy added. 

“This is a great result because what matters most is what happens when consumers encounter our brands at retail and our POS results tell us that consumer demand for our products remained healthy throughout fiscal 2026. We delivered POS growth of approximately 4 percent, representing our fourth consecutive quarter of positive year-over-year POS growth,” the CEO reported. 

Outdoor Lifestyle category POS increased by 7 percent y/y in fiscal 2026. 

Shooting Sports category POS, which the company believes aligns more closely with NICS background check results, increased by 1 percent for the fiscal year. 

“Innovation remains one of the most important drivers of our business,” Murphy continued. “New products represented approximately 29 percent of fiscal 2026 net sales, continuing a consistent track record of innovation across our portfolio. Today, we have more than 440 issued and pending patents, the largest number in our company’s history, and the impact of those patents is profound.” 

The CEO shared that products that are protected by one or more patents generated roughly 54 percent of the company’s net sales for fiscal 2026, compared to just 28 percent when AOB was spun off from Smith & Wesson Brands in August 2020. 

Fiscal 2026 Category Summary
Outdoor Lifestyle category net sales, which consist of products relating to hunting, fishing, meat processing, outdoor cooking, and rugged outdoor activities, represented approximately 58 percent of fiscal 2026 net sales, up from 46 percent at the company’s spin-off. 

“This evolution reflects our focus on large, attractive outdoor recreation markets where innovation can drive consumer engagement, distribution expansion and long-term growth,” said company CFO Andy Fulmer. He said Outdoor Lifestyle net sales for the fiscal year decreased 13.1 percent compared to the prior year. Adjusting for the Acceleration, net sales in Outdoor Lifestyle decreased 1.6 percent year-over-year. 

Shooting Sports category net sales, which includes solutions for target shooting, aiming, safe storage, cleaning and maintenance and personal protection, declined 15.9 percent y/y, said to be driven mainly by a decrease in aiming solutions. Adjusting for the Acceleration, Fulmer said Shooting Sports net sales declined 10.4 percent year-over-year. 

Fiscal 2026 Channel Summary
Traditional channel net sales decreased by 13.5 percent in fiscal 2026. Adjusting for the Q1 acceleration into fiscal 2025, Fulmer said traditional net sales “actually increased” by about 1 percent. 

“Consistent with our comments throughout fiscal 2026, our largest e-com retailer continued to reset its inventory, which we believe was in response to tariffs,” the CFO explained. “Accordingly, our e-commerce net sales decreased by 15.6 percent in fiscal 2026. That said, we were encouraged to see an improvement in that reset activity as the year progressed.” 

Domestic channel net sales, which generated approximately 94 percent of total company net sales for the year, decreased 13.4 percent y/y. 

International channel net sales, which represented 6 percent of total annual net sales, decreased by 26.7 percent compared to the prior year, said to be “largely the result of U.S. trade policy uncertainty. 

Fiscal 2026 Profitability and Expenses
Gross Margins increased 10 basis points y/y to 44.7 percent of net sales. The increase was said to be due to the timing of pricing actions to offset higher tariff costs as well as a higher percentage of new product sales, which were said to “typically generate higher gross margins.” 

“Those increases were somewhat offset by sales of slow-moving inventory, increased depreciation and higher inbound freight and tariff costs,” Fulmer noted. “We’re pleased with this result, which is consistent with our long-term target for gross margins in the mid-40s.” 

Regarding tariffs, Fulmer said the company has taken steps to file for a refund of duties paid under the tariff orders that were later deemed unlawful. 

“In Q4 of fiscal 2026, we filed a refund claim related to IEEPA [International Emergency Economic Powers Act] tariffs in the amount of $15.2 million, and we recorded a receivable for refund in other current assets,” Fulmer detailed. “Of that $15.2 million, we reduced our inventory carrying value by $10.8 million and the balance of the $4.4 million reduced our cost of goods sold to offset IEEPA tariffs amortized in Q3 and Q4.” 

GAAP Operating Expenses totaled $94.2 million for the fiscal year, a decrease of $5.2 million compared to fiscal 2025. The decrease was reportedly driven by a reduction in intangible amortization, lower sales volume-related expenses, decreases in variable compensation and depreciation, and “careful cost management” that resulted in reduced costs across the business. Fulmer said those decreases were offset by increased public company costs as the company emerges from EGC (Emerging Growth Company) status and a $3.4 million non-cash impairment charge related to the divestiture of the company’s UST (Ultimate Survival Technologies) brand, which focused on outdoor survival, emergency preparedness, and camping gear. 

On a non-GAAP basis, operating expenses reportedly decreased $6.6 million in fiscal 2026 to $80.3 million. Non-GAAP operating expenses exclude non-cash impairment, intangible amortization, stock compensation, and certain nonrecurring expenses as they occur. 

Fulmer added, “I believe the OpEx result in fiscal 2026 reflects our disciplined approach to consistently avoiding unnecessary expenses. This philosophy helps us maintain a lean, agile, and asset-light model that can adapt to change without requiring abrupt cost cuts, especially in the uncertain macro environment we faced in fiscal 2026.” 

AOB posted a GAAP EPS loss of 73 cents per share in fiscal 2026, compared to a loss of 1 cent per share in the prior year. Non-GAAP EPS in fiscal 2026 was a positive 28 cents per share, compared to 76 cents per share in fiscal 2025. 

“Our fiscal ’26 figures are based on our fully diluted share count of approximately 12.9 million shares. For fiscal 2027, we expect our fully diluted share count will be about 13.2 million shares outside of any share buybacks that may occur,” Fulmer added. 

Full-year adjusted EBITDA in fiscal 2026 was $10.2 million compared to $17.7 million last year. 

Balance Sheet and Cash Flow Summary
AOB ended fiscal 2026 with cash of $21.4 million and no debt after repurchasing approximately $5.1 million of its common stock. 

“As we’ve discussed before, our business is seasonal with the highest quarterly net sales typically occurring in Q2 and Q3,” Fulmer noted. “This pattern generally results in operating cash outflows in the first half of the fiscal year, followed by cash inflows in the second half as receivables are collected and inventory levels decline.” 

He said this seasonal pattern played out as expected, and AOB generated $21.3 million in operating cash in the second half of the fiscal year. 

AOB ended the year with inventory of $91.9 million, a decrease of $9.4 million compared to the prior fiscal year-end. The decrease reportedly included a reduction in capitalized tariffs as well as the move of UST inventory to assets held for sale and a planned reduction in overall inventory levels. 

AOB ended the year with Capex of $2.5 million, compared to $3.9 million in the prior year. 

For fiscal 2027, the company expects to spend $3.5 million to $4 million on tooling and patent costs, consistent with our asset-light operating model of CapEx at less than 2 percent of net sales. 

“Our balance sheet remains strong and debt-free,” Fulmer stressed. “We ended the year with no balance on our $75 million line of credit, so we entered fiscal ’27 with a total available capital of over $110 million.” 

During fiscal 2026, AOB repurchased roughly 551,000 shares of common stock at an average price of $9.24 per share. At year-end, the company still had roughly $8.1 million of availability remaining on its $10 million share repurchase program, which runs through September of this year. 

Outlook
In fiscal 2027, AOB reportedly plans to grow net sales and profitability by leveraging innovation. 

“While the macroeconomic environment remains uncertain and external factors such as inflation, interest rates, geopolitical developments and evolving consumer spending patterns may continue to fluctuate, we believe that periods of change often create the greatest opportunities for companies like ours that can innovate and adapt quickly,” Fulmer stated. “As we move through the year, we will continue to closely monitor economic and market developments, adapting where prudent as conditions evolve.” 

Based on the trends seen at the end of fiscal 2026, America Outdoor Brands expects net sales in the range of $200 million to $210 million for fiscal 2027, which, at the midpoint, would represent growth of 7.5 percent over fiscal 2026 reported net sales. 

“As we think about the flow of net sales over the year, we expect to see our typical seasonal pattern play out in fiscal 2027 with Q1 coming in as our lowest net sales quarter, Q2 and Q3 as our highest net sales quarters and Q4 coming in with higher net sales than Q1,” Fulmer outlined. “We expect Q1 net sales to be approximately 20 percent higher than reported net sales for Q1 of fiscal 2026.” 

AOB estimates that approximately $6 million of the $10 million accelerated orders into fiscal 2025 came from Q1 and fiscal 2026 and the remainder from Q2 and Q3 in fiscal 2026. 

“This implies we expect Q1 net sales in fiscal 2027 to be roughly flat to up slightly year-over-year on a normalized basis,” Fulmer estimated. “Based on our net sales volume in Q1, we expect adjusted EBITDA to be slightly negative.” 

Full-year gross margins for fiscal 2027 are expected to be “consistent” with the company’s long-term target range in the mid-40s. 

Fiscal 2027 operating expenses are expected to “increase slightly” due primarily to variable costs associated with higher net sales but partially offset by lower intangible asset amortization. 

Fulmer added, “We remain committed to disciplined expense management and will continue to align our cost structure with business activity while preserving flexibility to respond to changing market conditions.” 

AOB expects Adjusted EBITDA for fiscal 2027 to be in the range of 6.5 percent to 7.5 percent of net sales. Fulmer said that at midpoint, this would represent an increase in Adjusted EBITDA of over 40 percent compared to fiscal 2026. 

“This level of profitability is consistent with our long-term operating model, which targets EBITDA contribution of 25 percent to 30 percent on net sales above $200 million,” he said. “We’ve demonstrated this level of performance in the past. And as our brands continue to introduce innovative and compelling products, we remain confident in our ability to drive sustained profitability over time.” 

AOB ended fiscal 2026 with net operating loss carry-forwards of approximately $21 million. Therefore, because of this benefit this provides the company, the company expects a minimal amount of GAAP income tax in fiscal 2027. 

Image courtesy Grilla Grills/American Outdoor Brands