On Clarus Corp.’s analyst call, Neil Fiske, president, Black Diamond Equipment, said Black Diamond’s sales grew 9.1 percent in the second quarter, reflecting robust growth across major categories and double-digit gains in Europe that offset more modest growth in North America. Black Diamond’s earnings also improved sharply due to tariff refunds and higher full-price selling.

Fiske said, “Overall, Black Diamond had a strong Q2 with revenue margin and EBITDA, all well ahead of prior year as our strategy of simplification, focus and business reshaping continues to pay off.”

Warren Kanders, Clarus’ executive chairman, said Black Diamond’s second quarter revenue, margin and EBITDA all increased year-over-year, calling it “evidence of the team’s hard work concentrating inventory on our highest volume, highest margin products.”

Overall sales in Clarus’ Outdoor segment declined 8.5 percent to $39.8 million, compared to $36.7 million in the year-ago quarter, reflecting the divestiture of PIEPS, the Austrian snow safety brand, in July 2025.  The brand was sold to a private investment firm for €7.8 million ($9.1 million). The Outdoor segment now only includes Black Diamond.

 Product Performance

Black Diamond’s “Big 3” segments of Mountain, Climb and Apparel drove 95 percent of total revenues and grew 9.5 percent. Fiske said, “The takeaway is clear. The core of our business is healthy and growing.”

For the quarter, Mountain was ahead 7.4 percent versus the prior year and the Climb segment jumped 13.5 percent. Apparel, marking its fifth straight quarter of gains, grew 7.4 percent.

Fiske noted that Apparel’s in-line or full-price sales improved “a robust 22.9 percent” while clearance and discontinued merchandise was down 61 percent. He said Apparel’s results demonstrate “a much healthier full-price business and fewer markdowns. We’re seeing excellent response and building momentum for our revamped apparel offering.”

Regional Performance

North America wholesale inched up 0.5 percent following 4.8 percent growth in Q1. North America digital direct-to-consumer, which represents 17.7 percent of the region’s revenue, was up 5.7 percent on the top line, “with much healthier margins and less discounting,” according to Fiske.

Europe wholesale was up 25.3 percent in dollars and 16.7 percent in constant currency. Europe’s digital DTC, which represents 5.3 percent of the region’s revenue, declined 10.6 percent in constant currency as “promotional activity and less profitable transactions” were intentionally reduced. Black Diamond’s international distributor channel’s revenues increased 10.6 percent for the quarter.

Profitability

Black Diamond’s gross margins improved to 52.0 percent versus 34.9 percent a year ago, largely reflecting the receipt of $6.1 million in tariff refunds in the quarter. Excluding the tariff refund, gross margins still improved 160 basis points to 36.5 percent year over year. Fiske said, “The improvement reflects the progress we’ve made in the quality of our inventory, our focus on our most profitable categories, less discounting and a more full price premium business model.”

Second quarter selling, general and administrative (SG&A) expenses at the Outdoor segment were $13.8 million compared to $13.7 million in the same year-ago quarter. Higher marketing costs that were offset by the benefit of $1.4 million for legal adjustments related to prior Consumer Product Safety Commission (CPSC) recalls.

Adjusted EBITDA for the quarter came in at $9.0 million. Excluding the tariff refund and the CPSC legal adjustment, adjusted EBITDA for the quarter would have been $1.5 million compared to $0.3 million in the prior year period.

Inventory ended the quarter at $72.2 million, up 12 percent and reflecting expected growth in the second half.

Fiske concluded in his formal comments, “In sum, we are pleased with our results in Q2 and for the first half. Our strategy is paying off. Execution continues to improve. Product and marketing are resonating with the consumer. Our relationships in the wholesale channel have never been stronger. Our ‘big 3’ categories have real momentum. We feel confident going into the second half, mindful that the conflict in the Middle East remains a major geopolitical and business risk.”

Kanders added, “With cleaner inventory, less discounting and a shift toward a full-price model, we are well positioned to drive improved profitability at Outdoor.”

Companywide Results

Companywide, Clarus’ sales in the quarter improved 1.6 percent to $56.2 million and topped guidance in the range of $51 million and $53 million. In the Adventure segment, which includes Rhino-Rack, MAXTRAX, Tred, and RockyMounts, sales decreased 11.9 percent to $16.4 million. Sales in the Adventure segment were below plan due to an unfavorable wholesale market in Australia and North America for Rhino-Rack and Maxtrax, partially offset by favorable FX rates

Kanders said, “At Adventure, we have improved the organizational shape to capture more margin as the business rescales. While second quarter sales did not meet our expectations, ongoing pricing actions and cost controls have paid off. Second quarter gross margin improved 420 basis points year-over-year.”

CFO Mike Yates said of the Adventure business, “In North America, initiatives to reach new customers have not met expectations. The one positive in the North American market remains the RockyMounts business, where we continue to see solid demand. With a new product introduction, we expect RockyMounts to remain on a growth trajectory.

“In Australia, where we had previously noted a difficult outlook, sales were better than forecast despite consumers dealing with higher fuel prices and elevated interest rates. RockyMounts continues to be a bright spot in Australia, showing increased traction. In Europe and Asia, brand penetration is also improving as we delivered double-digit growth in France, Germany, the U.K. and Japan. Although that strength was not sufficient to offset weaknesses in our larger markets, an important point to make about the softer sales is that we believe that the decline has been market-driven rather than share-driven. Against this backdrop, we continue to focus on what we can control, driving margin expansion, maintaining cost discipline and improving operational efficiency.”

Gross margin in the quarter was 48.9 percent of sales compared to 35.6 percent in the year‐ago quarter. The gross margin increase was primarily attributable to receiving $6.1 million of IEEPA tariff refunds, higher volumes and a favorable product mix at the Outdoor segment, and a favorable product mix at the Adventure segment, which was partially offset by lower volume at the Adventure segment.

SG&A expenses were $24.3 million compared to $26.9 million in the same year‐ago quarter, reflecting lower marketing costs, depreciation, amortization and other expense reduction initiatives across both segments to manage costs and the removal of PIEPS due to its sale during 2025.

Net income was $4.7 million, or 12 cents per share, compared with a net loss of $8.4 million, or 22 cents, in the year-ago quarter.

Adjusted net income was $6.8 million, or 18 cents, compared to adjusted net loss of $3.1 million, or 8 cents, in the year-ago quarter. Adjusted net income (loss) excludes amortization of intangibles, impairment of indefinite-lived intangible assets, restructuring charges, transaction costs, contingent consideration benefit, and stock-based compensation.

Adjusted EBITDA in the quarter improved to $7.6 million from a negative $4.4 million a year ago , or an adjusted EBITDA margin of negative 8.0 percent, in the comparative year‐ago quarter and exceeded guidance calling for a $3 million loss due largely to tariff refunds.

Acquisition of ONWRD
In June 2026, Rhino-Rack USA completed the acquisition of certain assets and liabilities constituting ONWRD Supply Co. (ONWRD), an outdoor inspired accessories brand that makes modular storage and organization systems for cars, trucks, vans, and SUVs. ONWRD’s products feature customizable panels, headrest attachments, and pouches designed to keep gear secure during off-road or daily travel. The ONWRD business has been integrated into Rhino-Rack USA’s existing operations in Colorado.

Strategic Review
The company said its Board of Directors’ previously-announced review t of strategic alternatives to enhance shareholder value is continuing. Kanders said, “We continue to explore a range of potential actions aimed at unlocking value more effectively than the market is currently recognizing today. We have retained Jefferies as our financial adviser to assist in this process. Potential alternatives could include the sale of all or part of the business or other strategic or financial transactions involving the company.”

2026 Outlook
The company continues to expect fiscal year 2026 sales to range between $245 million and $255 million. Largely due to the tariff refund, adjusted EBITDA is now expected to range between approximately $12 million and $13 million, or an adjusted EBITDA margin of 5.0 percent at the mid-point of the revenue and adjusted EBITDA ranges. Previously, adjusted EBITDA were expected in the range of $3 million and $5 million.

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 $6 million for the full year 2026 compared to flat previously.

For the third quarter of 2026, sales are expected to range between $66 million and $68 million, and adjusted EBITDA is expected to be approximately $3 million. In the prior year, adjusted EBITDA was $2.8 million on sales of $69.3 million.

Q&A Section

Asked by an analyst about forecasts arriving calling for warmer-than-average temperatures across much of the southern, eastern, and coastal United States due to a strengthening El Niño pattern, Fiske said, “I’d say overall, there may be a little bit of a dampening effect from last year, but not a major concern for us at this time. We feel good about our fall order book and the sales outlook for the second half and feel good about our product lineup. So I’d say to the extent there is an impact, it’s been relatively modest and overcome by the strength of our product assortment heading into the back half.”

Asked about how higher oil prices resulting from the Iran war may impact raw material costs, Fiske said Black Diamond has seen “some cost factor inflation” affecting spring 2027 products but the net impact is still uncertain. He said, “Frankly, I think a lot of people are still watching to see if this conflict in the Middle East is prolonged or if oil will start flowing again. And I don’t think we’re going to know the picture on ’27 for another couple of months. And it all depends, of course, on the situation starting to normalize again. But there has been some inflationary impact already. I think the potential that we all feared when this conflict broke out hasn’t yet fully materialized, but everybody is watching and waiting.”

Image courtesy Clarus