Clarus Q2 net loss widens

Overview

• Clarus Q2 sales of $55.2 mln beat analyst expectations, per LSEG data

• Net loss of $8.4 mln, adjusted net loss almost stable yr/yr

• Co completes sale of PIEPS brand for $9.1 mln

Outlook

• Clarus anticipates challenging consumer demand for the rest of the year

• Company expects benefits from structural improvements as demand normalizes

• Company sees uncertainty from tariffs impacting consumer demand

Result Drivers

• OUTDOOR SEGMENT - Sales increased by 1% due to a shift in timing for IGD revenues, partially offset by declines in direct-to-consumer channels in both North America and Europe

• ADVENTURE SEGMENT - Sales declined by 8% due to reduced demand from global OEM customers and challenges in the Australian wholesale market

• GROSS MARGIN DECLINE - Lower volumes and unfavorable product mix in the Adventure segment, particularly due to promotional sales in North America, led to a decrease in gross margin

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the recreational products peer group is "buy"

• Wall Street's median 12-month price target for Clarus Corp is $4.00, about 6.8% above its July 30 closing price of $3.73

• The stock recently traded at 21 times the next 12-month earnings vs. a P/E of 11 three months ago

Press Release: ID:nGNX2vPqgR