Clarus Corporation, owner of the Black Diamond and RockyMounts brands, reported 2026 first-quarter results that reportedly reflect continued execution of its simplification strategy, including a greater focus on core, higher-margin products and tighter cost control across its Outdoor and Adventure segments.

Clarus Executive Chairman Warren Kanders told analysts and investors during a Thursday conference call that the company grew revenue and adjusted EBITDA year-over-year (y/y) and expanded consolidated gross margin despite ongoing geopolitical and macro uncertainty in the global outdoor market.

Kanders also said Clarus has retained Jefferies LLC as financial advisor to review strategic alternatives, suggesting that the company’s Board does not believe the company’s stock price reflects the real value of the business.

“As we have previously stated, we do not believe our current stock price reflects the sum of the part value of our two segments or the long-term potential of our businesses,” Kanders said in his prepared remarks, referring to the company’s Outdoor and Adventure segments. “The Board is confident in Clarus’ future and the undervalue of our iconic brands, which is why we have initiated this review to enhance shareholder value.”

He echoed the company’s earnings release when stating the potential alternatives include the sale of all or part of the business or other strategic or financial transactions involving the company.

“We are committed to exploring a range of potential strategic alternatives designed to unlock value more effectively than the market is recognizing today,” he said. The review will run in parallel with our continued execution of the simplification strategy.

Management took no questions regarding the strategic review.

Outdoor Segment
Neil Fiske, president, Black Diamond Equipment, said the Clarus Outdoor segment, which is dominated by Black Diamond Equipment, delivered solid results in Q1 with revenue, margin, and EBITDA “all well ahead” of the prior-year period as the strategy of simplification, focus, and business reshaping continues to pay off.

Total Outdoor segment revenues for the quarter were up 5.4 percent y/y with contribution from a blend of the segment’s go-forward categories and those that the company is exiting, such as bindings, lifestyle footwear, and avalanche airbags.

“Importantly, our core go-forward styles and categories grew 7.0 percent versus Q1 of last year,” Fiske highlighted. He also noted that his remarks exclude the divested Pieps business from the prior year to provide more comparable results.

Fiske said the “Big 3” business units, mountain, climb, and apparel, were up 6.7 percent year-over-year and now account for over 90 percent of total revenue.

  • Mountain was said to be ahead by a “healthy” 7.7 percent y/y.
  • The Climb segment reportedly “rebounded nicely” with a 6.6 percent gain.
  • Apparel was up 4.3 percent as the brand laps the high level of clearance on PFAS inventories from the prior year. Full-price apparel sales were said to be up 10.1 percent y/y.

Gross margins improved 190 basis points y/y, “even though Q1 of last year had not yet been impacted by tariffs,” Fiske noted. “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,” he detailed.

Operating expenses (OPEX), excluding restructuring, were reportedly up 11.6 percent for the quarter. OPEX for the quarter included $802,000 for CPSC legal costs and $425,000 for consulting work to improve the logistics, fulfillment costs, and profitability of the segment’s European operation. Excluding these items, SG&A was up 7.3 percent versus the prior-year Q1 period.

“Restructuring costs of $793,000 for Q1 reflect the actions taken at the end of 2025 and early 2026 to further streamline our cost structure, including headcount reductions, store closure, and slimming down our athlete roster,” Fiske explained. “These restructuring costs have been added back to adjusted EBITDA, but the cost of the Europe consulting project have not.”

The segment chief said they do not anticipate any further restructuring or consulting costs in 2026.

Adjusted EBITDA for the quarter amounted to $1.4 million – a 15.2 percent improvement year-over-year – including $802,000 for CPSC legal costs and $425,000 for our Europe consulting project.

Inventory
Inventory ended the quarter at $61.9 million, up 10 percent versus the end of the prior-year period.

“This increase reflects the higher cost of tariffs in our base, as well as strategic investments we’ve made in our franchise styles to protect upside growth from strong demand,” Fiske noted.

The Trump Effect
In talking talking tariffs, Fiske said they could see some benefit from the new tariff schedule that has been put in place after the U.S. Supreme Court ruling.

“We’re mindful that those tariffs are subject to ongoing review and potential changes,” he said.

Still, Fiske noted that the business is seeing “substantial cost pressure” from the Iran war in everything from aluminum and other metals to polyester and nylon to printed circuit boards to freight and logistics costs.

“At this still uncertain stage, we see these two effects, lower tariffs and higher factor costs, roughly canceling each other out for the balance of the year,” he suggested. “That said, a prolonged conflict would lead to factor price increases that outweigh any gains from lower tariffs. In that case, we would look at price increases beginning in July of 2026 to mitigate any potential margin compression.”

Regarding tariff refunds, Fiske said they are following the applicable process to claim IEEPA tariff credit, which they estimate to be $6.2 million coming back to Black Diamond, subject to approval.

Regional Summary

North America
North America Wholesale grew 4.8 percent. North America Digital DTC – which represents 18.2 percent of North America revenue – was down 9.7 percent y/y due to less promotional volume and clearance activity.

Europe
EU Wholesale was up 16.2 percent y/y in U.S. dolalrsi and up 4.9 percent in constant-currency terms. EU Digital D2C – representing 5.3 percent of EU revenue – was down 43.6 percent in constant-currency terms as the brnad pulled back on both promotional activity and less profitable transactions.

International Distributor
Fiske said the International Distributor channel was up 7.9 percent y/y for the quarter.

Legal Matters
With respect to the open matter with the CPSC and DOJ, the company in late 2024 was reportedly notified by the CPSC that the unresolved matter involving fines against Black Diamond had been referred to the Department of Justice, according to call comments made by company CFO, Secretary, and Treasurer Michael Yates.

“To date, the DOJ has not pursued a civil lawsuit regarding this matter,” Yates explained. ‘However, in early 2025, the DOJ served the company and Black Diamond with grand jury subpoenas in connection with a criminal investigation, requesting various categories of documents related to Black Diamond’s avalanche beacons.”

Yates said the company has cooperated with the DOJ in responding to its discovery request and have produced substantially all of the documents requested. The DOJ has reportedly sent letters to John Walbrecht, Black Diamond’s former president, and Rick Vance, Black Diamond’s former director of quality, advising them that they are targets in its investigation. Yates said the DOJ has also served subpoenas for grand jury testimony on a current and a former employee. The DOJ recently interviewed the former director of quality assurance and requested an interview with his successor.

Outlook
Looking ahead, Fiske said BDE has a strong order book for the second half of the year, which should support growth for the full year 2026 compared to 2025.

“The wild card, of course, is the substantial risk posed by a prolonged Iran war to consumer discretionary spend, as well as factor costs, supply chain, and deliveries,” he explianed. “In the event of an extended conflict, we will be forced to raise prices to offset escalating factor cost inflation, potentially as soon as the fall season shipments, which begin in July.’

Fiske concluded, “External factors aside, we are pleased with our continued progress on the fundamentals for Black Diamond. This quarter’s results show it. I’d again like to thank our teams around the world for their dedication, creativity, focus, and skill.”

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

Image courtesy Black Diamond Equipment Photo credit: Jonathan Watt