Solo Brands Inc’s. sales declined 9.5 percent in the first quarter ended March 31 as Solo Stove’s revenues tumbled 49 percent, as planned, due to efforts to reduce discounting and promotion in its DTC channel. The company showed a loss in the period and reiterated its going concern warning.

John Larson, interim president and chief executive officer, commented, “The first quarter’s performance reflected strong sales from the Chubbies segment, up 44 percent from a year ago, generating segment EBITDA of 26.5 percent of net sales. We are pleased with Chubbies’ strong consumer engagement and demand. Solo Stove first quarter sales were down versus a year ago, as expected, to realign our DTC promotional strategies and collaborate with retail partners on the strategic cadence of promotions and product launches. The team’s disciplined execution of cost reduction initiatives generated solid evidence of profitability improvements in both February and March compared to the prior year.

“We are highly focused on addressing our existing debt structure to deliver financial flexibility as we transform and stabilize the business this year with a focus on improving marketing effectiveness under the leadership of our new interim CMO, building pricing strategies to align channels, creating a product innovation culture and playbook, and right-sizing the cost structure, including an acceleration of tariff-related manufacturing diversification and contingency plans.”

Consolidated First Quarter 2025 Highlights Compared to First Quarter 2024

  • Net sales of $77.3 million declined 9.5 percent from $85.3 million. The decline was primarily within the Solo Stove segment direct-to-consumer (DTC) channel. The DTC channel and retail channel net sales increased in the Chubbies segment.
  • Gross profit of $42.6 million, or 55.2 percent of net sales, decreased by 400 basis points compared to the prior year period. Adjusted gross profit of $42.8 million, or 55.4 percent of net sales, decreased 410 basis points versus the prior year period.
  • Operating expenses decreased $3.6 million to $53.2 million, down 6.4 percent, primarily driven by decreases in marketing spend and distribution costs within the Solo Stove segment, partially offset by one-time or non-cash restructuring, contract termination and impairment charges of $5.8 million in the current period
  • Net loss of $18.6 million, 24.0 percent of net sales, or $0.21 per basic and diluted Class A common share, increased from $6.5 million, 7.6 percent of net sales, or $0.06 per basic and diluted Class A common share from the prior year period. Adjusted net loss of $6.2 million, or $0.08 adjusted loss per basic and diluted Class A common share, also declined from adjusted net income of $1.7 million, or $0.03 adjusted income per basic and diluted Class A common share from the prior year period.
  • Adjusted EBITDA of $3.5 million, or 4.5 percent of net sales, compared to $4.3 million, or 5.0 percent of net sales from the prior year period.

Segment First Quarter 2025 Highlights Compared to First Quarter 2024

Solo Stove

  • Net sales of $26.1 million declined 49.2 percent, driven by declines in both retail and DTC channel net sales, primarily due to eliminating our heavy promotional discounting in our DTC channel to better align with retail partners, lack of new products and reduced marketing spend, as well as lower replenishment from our strategic retail partners.
  • Segment EBITDA was a negative $1.5 million, or negative 5.7 percent of net sales, compared to a positive $7.6 million, or 14.9 percent of net sales, in the prior year period.

Chubbies

  • Net sales of $42.7 million increased 43.9 percent, driven primarily by retail channel net sales from continued growth in the strategic retail network and an increase in DTC channel net sales.
  • Segment EBITDA of $11.3 million, or 26.5 percent of net sales, improved from $4.9 million, or 16.6 percent of net sales, in the prior year period.

Consolidated Balance Sheet

  • Cash and cash equivalents were $206.4 million as of March 31, 2025 compared to $12.0 million at December 31, 2024, primarily as a result of the net drawdowns of $277.3 million on the Revolving Credit Facility in the first quarter of 2025.
  • Inventory was $103.1 million as of March 31, 2025 compared to $108.6 million at December 31, 2024.
  • Outstanding borrowings were $346.3 million under the Revolving Credit Facility, and $82.5 million under the Term Loan as of March 31, 2025. As of March 31, 2025, outstanding borrowings were reclassified from non-current to current, as it is likely that the company will be required to report non-compliance with the interest rate coverage ratio and total net leverage ratio financial covenants under the credit agreement governing our Term Loan Facility and Revolving Credit Facility. Solo Brands added, “As previously disclosed, there is substantial doubt of our ability to continue as a going concern.”

Solo Brands’ brands include Solo Stove and TerraFlame, known for firepits, stoves, and accessories; Chubbies, a casual apparel and activewear brand; Isle, maker of inflatable and hard paddle boards and accessories; and Oru Kayak, the maker of origami folding kayaks.

Photo courtesy Solo Stove