- Earnings call transcript Q2 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day everyone and welcome to American Outdoor Brands Inc.

Second Quarter Fiscal 2023 Financial Results Conference Call. This call is being recorded. At this time, I would like to turn the call over to Liz Sharp, Vice President of Investor Relations for some information about today's call.

Liz Sharp

Thank you, and good afternoon.

contain and may forward-looking today comments predictions, other estimates statements. Our

to project, of other intend, intended statements. words use estimate, similar those like is and Our believe anticipate, expect, forward-looking suggest, should, expressions identify indicate,

and in statements and inventory strategies vision; and conditions our objectives, trends. market related Forward-looking development, for growth our market and evolution; and include to our our statements product our also products; general; focus, our demand strategic opportunities industry share in regarding market products and

represent Risk statements about could future, other forward-looking our to judgment Our our various filings. in the described results that securities and current to be subject risks considerations are materially cause actual they factors are our and different uncertainties. and

a website that time, on statements. replay of You to find of only no can this obligation at time-sensitive any information Today's update as our call is contains accurate we assume this as forward-looking those documents and well aob.com. call as

I our Our actual on results today. our about to today's could few from call. comments differ statements items note important have materially a

reference measures. certain financial non-GAAP we First,

amortization financial acquired financial whether Our income exclude discussed other always are are or on adjustments. and we shareholder of implementation, our acquisition posted of diluted costs, on found in when today's non-GAAP which release, results reference our fully intangible can costs, EPS, are today's costs compensation, assets, tax they be reconciliations EPS. as website. call press The filings cooperation as measures earnings well referencing non-GAAP to agreement GAAP we stock technology not measures Also,

turn Andy that, Brian CEO; to is call with and the on will call And CFO. over and Joining us Brian. I Fulmer, President today's Murphy,

Brian Murphy

thanks for everyone Thanks us. and Liz joining

strategy. challenges ability to performance on quarter long-term in our demonstrates ongoing second Our while macroenvironment executing the navigate successfully our

we those see to calendar long growth quarter, reflect the focused, our term. In our for identified achieved the positioning our second too and that economy sales and and levels sheet accordingly number consumers reflect moments net new move I it’s we strengthening marking to control, of early balance XX% year, remain results executing deliver of the our leveraging our can as best fiscal our deliver new ability to innovative elements of we our a for XXXX products, company strategic While will over believe what our into we the solutions priorities our achievements success recent introduced of pre-pandemic to matter. that support while dedication culture in and innovation several above

growth is of ago. and the an it brand platform over just investment made we represents part our important strategy our pandemic years an E-commerce two to Our and spin-off prior

continue issues XXX%. our sale declined year our ago retailers, Maker, Your brand. which channel believe Within sports resonating direct-to-consumer lifestyle E-commerce also fishing, compared in Grilla sales to growth second our strong pre-pandemic which which sales our that outdoor as business not While to typically meat channel processing total will to and products XXX% a levels than or category, E-commerce XXXX. of more category of nearly includes quarter. in activities opportunities how net open consumers, mitigate to quarter limited with Consider pre-pandemic of direct-to-consumer delivered online to driven Direct-to-consumer shooting buy level. help be XX% cooking gauge the over of our brands consists of We sales XX% by sales grew fluctuations quarter, equipment, by term XX% our total retailers, since dollars. Direct-to-consumer of in camping, We over this our one year-over-year inventory those is our help category, percentage remain largely brands delivering of grow impacted category of outdoor cyclicality. is in which about E-commerce lifestyle been well over sales these cooking our our outdoor net and rugged comprised to MEAT! has generated as net of lifestyle the Together generate are outdoor category growth hunting, short related hindered to such sales excited second the two over to susceptible growth our in and quarter, fiscal the and compared our our products. outdoor our more total remain outdoor

our in buy. X% an By sales of increased foot that lower favorable they impact media the to inventories factors out generated years online their and key open both of launched inventories reporting declined X% products This to both foot lower XX% includes Bloomberg and sports orders be of sights, mortar across second offerings, way firearm news for year-over-year activity dealers and OEMs, range buy Innovation operate retailers reports categories. update, open continuation past quarter of biggest the appear on to largely sales for retailers. generally national accessories laser a With strategy response long-term and to Black to initial quarter. increases help in traffic channel, category, sales. retailer and since while their should improve in of to distributors. limiting two the Friday their and all last result to lower products, out our such stores, quarter, their element of physical our traditional its within consumer brick shopping net the a on laid Namely, Turning as placed is available new the protection customers shooting The good which shooting consists in mortar of sales traffic, of fewer to which brick dollars. work our personal had we and

Unlock products organically continue of quarter. new the deliver to exciting process We leverage & second steady a to Dock developed our in flow

between launched our based on a meat line few simplify help $XXX time and processing, high we simultaneously. plate and grinders those. retails Let of you solution. options. knives MEAT! Maker grinders, German bestselling me We which unique Grind our Dual DTC through these introduced Knife set, tell $XXX size of find through Maker about our dual line course them made channel. MEAT! grind and we includes bypassing We to Kitchen handles Your save designed quality different G-XX separate for a meet specifically a premium meat our a Grinders, which These steel and storage Adding of with market blades, is and Your customers,

with cutlery. a with just launched and want I transportation non also Knife for safe Butcher MEAT! well leather great carrier that impressed And loyalty that and we're we've continue of and here the brand continued grips, to us very knife with consumers meat convenient flock as brand under Maker developed provide proprietary We feedback. premium slip reviews websites add as and to our a the Your set to storage as

Infinite. can versatility Lastly, the BOG tripods platform Sherpa and hunters, everything the used we and compact and for incorporate provide has These which innovative a functionality BOG photography, for tripods lines, from accessories. for deliver with premium be synonymous hunting to features, and enhanced lightweight hunting two launched proprietary become whom

first into of The sports is entry was Expo, recognized new attended we During the where Claymore National the accessory. quarter, Association the our the as best shotguns market. meaningful Claymore Sporting Wholesalers Target Caldwell Goods Clay the Thrower

gave great thrower to when have first which to he Some of a to it were foot incredible operated of The clay demonstrate show the public. you in requiring a people unveiled us an this without battery. of of and clay the give Show innovation all claymore was us provides the the joined January up lined at innovative The benefits opportunity electric thrower the buzz try. a show SHOT

now are claymore shipping We to the customers.

about excited opportunity the by are new each of We offerings. addressed these

launched is the that As in the our it valued our you'll Investing pipeline our products This within to we several was several the priority company products with late planned that have remains Dock MEAT, developed just our the across internally tuned Bubba, Grilla growth. of in for trailing brands great many strategic innovation, support one at most many And brand, fiscal and find million intellectual new is Stay assets. long-term $X.X of our which on Your QX. Unlock portfolio. other power a thrives revenue plan. XXXX new & in MEAT! delivered process for fuel of in end our apparent XX-month capital year. I outlined innovation exciting organic and our innovation will in top of And growth updates continues more on a Maker property of of the

on spending model closer our utilizing Our as highest in its long-term these report Current Trace will completed we schedule. includes that facility. makes as rising that we last focus announced provide savings a Wilsonville, but Michigan, strategy profitability our to encouraged detail fact as is rates level well consumer and future Dallas, and move both our business Crimson On participation grow. to consolidations Texas, high outdoors new it those consolidations call, that objectives. the of predict Oregon, our years. environment by consolidate right patterns operations leverageable interest would inflation happy more Nevertheless, we head our into in we consumer operations into the help I'm year. of in we difficult Holland, at are from also recently we on to Grilla the in will Andy us our Missouri as

outdoors, that they're of once industry, someone by to likely resonate continue company recent nimble, portfolio encouraged an as core our We the strong that begins consumers. which to innovative, are also brands emerging our in a with reports growth with a participate indicate in

present opportunities for term. are about the We brands trends excited growth in these long the our

our will our executing focus remain long-term the control. our we such, As elements strategic while managed on within plan carefully

our turn costs robust can continue so well opportunities and financial over we is While to we and With seeking $XXX teens. our to will our we we new the long-term remain in EBITDAS to to ensuring positioned infrastructure and high plan, to product beyond Andy out net to that, achieve results. lower our margins pipeline, in discuss and invest I'll sales which where reach to it do in mid million

Andy Fulmer

fiscal for pandemic an year, of decreased increase QX quarter basis fiscal in believe most overall decrease retailers ‘XX. second of of in for in last year, in year points a E-commerce over our were year, efforts increase the to second the we million, margins $XX.X roughly reduced of quarter but which retailers continued orders compared the of at their sales our to Net million, which $XX.X The from Brian. channels, a decrease compared recent combined XXXX. pandemic accounted decrease traffic a foot offset our QX Net was of sales XX.X% pre channels of brick-and-mortar pre from the their of last the Thanks, over XX% XX.X% significant representing prior strong XX% XX.X% and direct-to-consumer a locations is lower driven in to over XXX% year-over-year over business. XXX to came by consists sales XXX% of quarter, at increase retailers traditional by for quarter, reduce online second the with Gross the prior period, XX.X%. the due increasing to during our inventories. quarter

our as lower and $X.X delivered sales and call, sales. stock and will expenses operating costs reserves, reduce our During year. year. non-recurring to compensation inventory reduced distribution of landscape. last which G&A they freight going efforts to spend million, and due to reduction commitment third navigate QX, remained QX quarter. On for compensation, declined our from through compared Non-GAAP Non-GAAP outbound last higher advertising, current digital QX occur. appropriate to Within year. OpEx, expenses increased dollars costs quarter inventory last net benefited reductions It's GAAP tariff certain operating in due than in percentage to contain expenses due as million our costs year QX as on the exclude to million, the of Marketing we advertising spent in the to related note operating costs savings to were dollars of $XX.X flat timing we they in intangible in million and a where discussed that were however, the our forward. move $XX.X last lower majority to of to lower amortization, selling we advertising But freight last and from as $XX.X the variable decreased expenses, the were costs. now overall we net economic levels important year-over-year

we indicated, on our remain Brian As model. focused business leveraging

into demonstrated that the consolidations in operations announced QX when in our Oregon, performance we our Columbia, and Our Michigan, of in facility focus main Texas Missouri.

did operations our consolidation QX, team outstanding efficiently job an tackling projects. During these

Columbia warehousing from As our for of distribution all facility. mid-November, now conducted entirely brands being our assembly, of and functions our are

help will us call, As we operations, our these our simplify Missouri discussed maximize cost and facility. last efficiency, the on leverage consolidations warehouse of

GAAP be begin see And the roughly savings year. annualized was from last with $X.XX the And savings of fourth earnings for non-GAAP we'll QX year. EPS in will fiscal compared net QX consolidations basis. million $X.X our We compared an as $X.XX $X.XX quarter EPS cost on to expect to this last $X.XX was year. for

Our QX based million figures of count our diluted fully XX.X shares. are on share approximately

fully we XX.X For our shares. be expect diluted compared EBITDAS last the $XX.X million full for roughly was year, million Adjusted quarter count share the $X.X million, to year. to

Turning inventory. that repurchases. receivable and year's share operating by bills second of year. million cash million through while cash the this $X.X margins. just continue for pleased and ending operating outflow compared accounts roughly virtually offset in $X.X by implementation Recall the this of maintaining outflow sheet capital repurchase pleased million last share our while from QX last leverage decrease program. over with $XX.X cash to spent million for increased ended driven I'm million We our balance flow $X.X our gross increase flow, was million was our Positive share Accounts with planned, and year first sheet to we $XX.X sequentially all balance very debt strong $X.X to a during this $XXX,XXX We're and cash strengthen with large the for down quarter cash zero, net to QX, in the to given that quarter sequentially We the shareholders to increase the returning receivable outflow ERP inventory, QX in sales. result as quarter. with of net due

schedule. You'll reduction that recall initiatives. commenced actually great we're last report quarter of targeted bit initiatives. a had our has done we discussed executing that to we on inventory a ahead very I'm team And job pleased those

reduction forward We will driving continue inventory conversion. to on going cash focus further

between $XXX,XXX $X.X million are $X.X we and plans to a $X.X ERP that and expenditures, amount our and CapEx capital million. still now Breaking full range on to maintenance at CapEx $X ‘XX roughly between to to $X.X come product expect million. project expect we lowering of fiscal spending Turning spend for by we in down, and tooling our million million

implementation. Now a brief update ERP on our

report live portion with X I've As on utilizing a we phased ERP are business Phase Microsoft successfully that X before, system, shared multi our pleased our approach with live went new go we I'm with planned. to small of October DXXX. as a

the entire AOB to kudos team. So

tiered process, was final Phase Our live one. Phase go system for good need into is designed a phase, now decision some that the In X we identified the which we've the X. enhancements

date, these will and our changes about any by system. efficiency project. expect just a new on one new go to the And days, day extend despite the XX the bit improve will February to While don't operational they live we timeline cost the add

So entire great team. to great result and the again, job

first in and and cost through costs both onetime as well systems for be time calculating allocation million of that strong $XX in operate organic order address three $X.X $XXX,XXX a treated implementation spending focus duplicative of haven't outstanding remain sheet additional positioned priorities, debt both of Last with expectations of still zero. for will priority to the credit parallel we February, our EBITDAS. our as OpEx in our $XX on $XX week, we growth. costs XXXX, which on net our invest paid ERP with as We maintaining just an in fiscal of line For our $XX today. non-GAAP when credit, million We one new adjusted anticipate very leverage changed. balance are us ended total We to leaving down ERP ratio operating costs on near well million in non-recurring a outstanding keeping amounts line as expense QX to capital implementation million, current million so

complimentary seek and capital shareholders. to to return Second, to acquisitions, third

funds shareholders cash returned further they Unlock can to as well this & by Dock use opportunities in capture repurchase arise. price at ability be Our as long foundation the attractive to to when turn board M&A shares for demonstrated QX, generation. at serves That flow process that cash cash access formula when generated $X.XX Ultimately, is term organic as when growth the time. that authorized we do $XX point best million program repurchase September. in roughly share. our any in of We willingness share during per an And our given of a capital XX,XXX the average

patterns trends. cautious Now, regarding their with going spending long outlook, turning our our to remain and levels, we are are distributors undetermined. outdoor positive forward retailers still consistently That consumer view, believe brands our consumer said, term and performing inventory in

our as could with on believe XXXX in as by XXXX a our levels To quarter, we quarter, and normalized as pandemic the QX higher as to expect seasonality our environment, sales QX. refresh the net consistent pre a to XXXX QX returned XX%. more continue prior typical previous occur As fiscal lowest quarter, the sales QX to in fiscal sales promotional fiscal by coming flow revenue to net calls result, QX than and we our noted for exceed with much you We've in highest pandemic. environment net

as sports we in a with seasonal in As fiscal half our promotional XXXX. to of mostly result, partners participate second in as retail our promotional plan the shooting other category, events well programs,

well costs spend, to Show in earlier. than as shows, to discussed QX industry relating ATA annual trade fiscal XXXX to we of OpEx, regard half As margins such, to fiscal with spending margins the the half in we QX to additional higher expect January, advertising and With gross XXXX. be I Shot due second expect of selling in and marketing the be as second OpEx as consistent such

than to QX higher we the expect mainly volume. sales slightly due OpEx be Lastly, spend higher QX, will

in investments long-term makes of term, and while business areas call plan identifying analyst. With execute continue containment, the mindful the strategic the we cost questions for our from Going needed where objectives. short our for let's that, being to to operator, open on sense grow forward, it

Operator

Instructions] Our question B. Wold Riley Securities. first with [Operator will from come Eric

Eric Wold

of Thank where kind you own you think about sense in kind does as assume kind channel remaining that only you. assume in can what of, for guess I your Hello, it, guidance Good need with ‘XX? of a did And then the retail restocked? solid your of that of kind as part assuming the others? restocking it’s When seen and assuming sales restocking think inventory [inaudible]. up kind give afternoon. versus have you DTC us is kind staying year? become into your the year one the same in status inventory or about you couple sense at I guess that past as you the thing of be fiscal Are see you framework last of of kind year non of you you retail continues we product question some kind from this quarters? back as demand and XX% to and are quo in much at

Brian Murphy

is this Brian. Eric, Hey, Yes.

we're year to where at below the was sports at terms in or our close prior was shooting it in the double retail of is at, and looking looked at outdoor digits product side digits. POS lifestyle versus certainly that through down And double quarter, this down time. So particular, I've the was last in year,

expect certainly product the to we out next of, over retailers to sell trend think to that that I through come begin question in back restocking, a coming would So as for quarters, as over the need we see yes, consumers. see And terms the we to us. will because positive about look

to trends Cyber Black be and rest our for customers back. holidays yes, So very look Friday, overall Obviously, seen TBD, but that positive. the see the the coming with Monday happened of what we

Eric Wold

that that? in that to start it should or expectation just not assuming Is back. the make in to XX% So that what come number is that outlook you're sure, included

Brian Murphy

today. I XX% is best our what certainly Yes, mean, the we know estimate, given

Eric Wold

or if consumer to that, Got the size growth of that it, anything kind of trends, guests goes another you obviously in great of the terms ASP, another and one way results anything there or one kind then can frequency that just health indicates beyond of point last purchases basket DTC overall the question, of way just number. in on

Brian Murphy

This Yes. again. is Brian

rank significant So acquired brand, our strong brands. MEAT, over Grilla. increases of Grilla certainly and majority the but results. year. impressed obviously, Both of the today And organic MEAT, And them some being the average with we those for both really DTC prior were really an of comes had from

folks customers. on XX% going So seeing mentioned about loyalty different about repeat we slicer purchased I repeat if a ring of preamble also two, at call to I around customers. sales customers we're had some the repeat And baskets, or on MEAT. the just for previously, meat back the we're the of And size up a a know see take those generally, the buy MEAT. but something look come have in new my brand and acquisition And mentioned more seeing and some before lot were grinder reviews in Grilla or products, this don't of strong we products.

are definitely the And overall shows think excited ranks. at consumers so it And about and they're money, spending that. spending really higher still I we're

Operator

next from Koranda ROTH come will Our question with Capital. Matt

Unidentified Analyst

on And guys, exactly the Mike what it’s off is Maybe is in that putting a Hey repeatable tune margins Matt. going forward? how just stronger to gross finer quarter? start driving for David

Andy Fulmer

question. Great Andy. is this Mike, Yes,

we've So months. last during by of lower overall, purchases six in we decrease this over had led the saw quarter, inventory, the kind

quarter. the costs kind of the of As you lower can much kind tariffs of freight lead unfavorable as to having costs, during us imagine, unfavorable those amount not

in I remarks. Going said, like forward prepared the

similar Second second kind saw of right half level into in well, of that a the pandemic, expecting year, that back we had as with kind with we're in the half second we're year. of year, which last normal of pre we're we programs last line promotional year of the that expecting half

Unidentified Analyst

filter Or P&L? with that have elevated we sold the Or through can then so inventory is so inbound Are was the going Okay, we costs? we forward? shipping do of to that more cost that? some normalize through fully higher still burdened kind

Andy Fulmer

question, not yet. but Great yet. not Yes,

down. them and six between times five seeing of little even freight they four were them because for those to capitalized So kind freight take We're way than it'll while inventory, lower are months But are into now through probably COGS. flush costs definitely anywhere ago. a costs

I probably another say would So quarters. couple

Unidentified Analyst

have that’s on been channel a finer going going a it. touched XX% Oaky, bit are to maybe the the to the of range the but And us start and to a channel high leaning to the approach of on to half taking in year? around tune we so. year? a more more full expect revenue that DTC, for digit helpful. Got restocking. We've get are the comping comp negative of the more past restocking E-commerce Can aggressive or implied it. mark single they putting to are XX% start, kind somewhere traditional businesses we earlier, like we negative for stance back the And of traditional also channel to to traditional in year retailers Or for the

Andy Fulmer

in really, dig haven't can't detail. that we Yes, we

inventory of QX, similar in a we that products kind of, competing retailers. at levels where had saw against we're we QX other we're environment However, our

on So which inventories focused they're are overall, open devices. those limiting reducing

before TBD shakes when talked loose. as So that Brian on about

Brian Murphy

some got here next bit. few have the we is year. And is we add, forget call huge additional we've new under and little a of my we're, things be, a new the which Bubba we that this out, of products Mike, products claymore, coming going in coming a out product in us. would are the Grilla to We've Yes. opinion, focused today, Brian. also not on let's for mention stream of lot introduced got a that each I

as So that's don't all play. just incremental. see right? necessarily restocking, incremental, that We new That's products

that's part well. so of as it a And

So we're on that. bullish very

Unidentified Analyst

we the prior sense. positive year quarter. a sales Grilla in we're one makes know in forma, But for I Last it period. pro of own Got, me. lot didn't the

Brian Murphy

TTM And a only we million. They million. MD&A, plus if that you'll our a were, $X.X was see meat our DTC is which is yes, then we in MEAT showing filed our -- roughly deck on Grilla look investor just that you basis take $X

can you other of, math going. see do kind So you from can if presentations, kind that's the you where of

Operator

from Our John Kernan next question come Cowan. with will

John Kernan

sheet afternoon, about it's inventory my should Thanks, the some of we inventory balance down good from year question. the the for understanding it flow of out flow retail traditional But model of the year. of that's into cash going as sheet, guys. cash channels might up where the statement, the in the Hey, backed be still. position is part where there's basis million a go overall is How in balance $XXX in product the shake of this to Thanks end the $X was to taking think on QX. they back at balance half we how on that your going big

year? come So the the cash on just to and this is confidence of curious, hand gives down is there that anything you create inventory, the going that I'm amount of stays a inflow into back half

Andy Fulmer

It's John, great question. this Yes, a Andy. is

that we've closer that reduction of drive we're we've were on had talked, that. the last targeted of initiatives conversion, the to quarter second schedule saying will year, inventory we cash these starting actually actually ahead So half

going the of the second $XX the the balance done. year, million to with at ‘XX those the past million half to talked that end, $XX in And inventory quarter, too that is had also continue of inventory I high that. we've in fiscal the on $XXX plus thought the we're we ended So of But $X think reduction million. we an about backlog. we're probably down we low balance. is cash -- in And drive But not in the to work very million convert pleased

was that said low. number we've So too that

some we're those. we inventory So executing time bring it'll levels the against But have take down. place. And to those in initiatives

John Kernan

line can fiscal calendar to year. the we excited about most that in into innovation half maybe pipeline, and next into by that it head product talk and year the year, as you're rate year calendar Got run the of improving the back brand get top

Brian Murphy

is this Brian. hey, Certainly, Yes.

which So categories like in the more of say within sports. we focused is would shooting Caldwell mentioned, stable our And category. brand, we're shooting stable, some sports I under larger in the

hands their the is, sports, into revolutionary shotguns product. getting it and getting also claymore opinion are on again, So my folks the is a that

a forward. think I product big going to Halo us going that's for be

to just that that's brand. more Arsenal, that product. come shipping Within we So reloading started Frankford on our

we're progressive consumers we're to SHOT into and and also now so showed if to reloading, begin units x to So we much some groundswell. about that began XX, about show just year, getting to you at last presses get their shipping pilot feedback which know build launch we our

those As before similar. MEAT! more Your development, in hatches honestly ASP we're few the of IP, looking how say products, the that Grilla. products the, get regard, it done products, Maker, products I that beginning some other with you'll brand here acquisition. a marketing nice and job we some out, has getting had a down now, With Grilla, products for at somewhat, this have creative from look and our out some innovations were see perfectly that our we're because how we're in lesson just a really do say we And very some some just worked shortly, I quite apply planned the with to we're you these we fantastic of and high of way so we've a build working would in of learned Grilla something given communities, products battening doing launching Grilla. more terms

next So Bubba coming And few then some those next then the right, in second. up you'll going of probably summer. the next And ICAST here the innovations got see Bubba, we've into quarter. quarters,

way we've me they're the talk got scale, that some So is smart totally fish for new and how if Strava of like it, fishing happen tournaments we're about those revolutionize the done. fishing, heard which you've working products, on

shipping that. And here in But so begin that on news more to come spring. the will

markets, a very few largely very say we're So disruptive some and markets really about. excited large the I'd products that quite new,

John Kernan

kind to in to margin, in margin year, Got nice a on was the how is final take the just What gross the the margin, we in XXX it, had Maybe question of back of past? year-over-year there basis then just gross in think gross half levers are my you've maybe term. this change but inflection of long been to margin talk XX%, that back should terms about not just you gross of XX% points.

Andy Fulmer

would couple the talked probably Like five certainly heard the four long I what you were worries. before, years container they about have in coming down up times costs no a ago. freight help. I the elsewhere, or of will say and term, Yes, costs

term, not say about, help Now high And there levels get still unfortunately, those be which really that costs would that are costs Outbound I higher, through. are probably fuel fiscal certainly cycle the There you to long OpEx. those keeping yet. But back will are talked the ‘XX, we should out start those some -- freight, that us John. down margin is normal. that's side, gross see in starting that in to that should to freight on

Brian Murphy

look into, expand I'll jump products is Brian, this margins. major quick. new Certainly we are that to way a really

acquire big sales. direct our our of step that's obviously about a the quarter, looking on total about side. to was in to So And only a initiative, direct on being with XX% retailers at of net gross either brands we consumer But to margin to last then not for are this opportunity presents and very careful, continue toes, or are very form also margin with competing to organically it good them. us not businesses take consumer, other to course to more careful

Operator

Mark Smith come will Lake Our next from Capital. Street with question

Mark Smith

guys, about Black and you hunting seeing such split of hear maybe else. you outdoor jab kind Can and trends clientele moving shoot from everything today We'd between love guys pretty hunt the company. are and diverse of that thoughts Hi, kind versus you and to season. realizing kind on camp your consumer into are what come Friday products talk of fish in

Brian Murphy

Sure, just real I say Black Monday. and Brian, Cyber on would Friday is quick Yes, this Mark.

of again, bundling, business, impressive increases direct-to-consumer really teams to we the Really the that. of earlier saw consumers, for just higher so speaks at ring numbers. impressive and willing things MEAT, Grilla did both volumes, which like higher for the portion side to a we consumers still are one spend to spoke of job the year-over-year, some least great Speaking a there, things

our lot the to And seeing IP is anything did hunting marquee see then encouraging out there. than would brand we of higher BOG. recall breakdown fishing that board. and in with relates terms under versus that fishing. I jumped hunt, tripods a at don't We as some trends see. of say shoot that's it to protected is else. So that me death-grip being the across so sell brand, our something product good BOG I

And trends related so else caught Mark nothing that side my that on see we but did some nice hunting to attention.

Mark Smith

Okay, as insight, kind we the today look particular of we're seeing positive. mixed data looks that at in shooting products, sports additional some pretty any

rifles work tie, increase that are kind to where kind more sales? accessory that that call guns. hand assuming or of better sales that that part you've your to of for centerfire rather Anything kind perhaps got seen to most firearm direct any we've of are of out November, tied than the For

Brian Murphy

as have said total digits inventory side, in that say we, next the down a drop say – Andy, I on shooting do we flat in shaken channel out then would as sports it been say to in was you seen last slightly. I it double late. the sales, has where would consistent And of the year, quarter. we're relates I'd versus earlier, and to with as I in what here the like

Andy Fulmer

shooting there. see agree. no, our is roughly XX% as is inventory see roughly the there, you amount of of, totally out a don't a dealers. there's we some I assuming we And there's our out But know, based inventory decent of amount sales, decent XX% on data mean, channel distributors, sports Yes, still of what of POS still that

Mark Smith

to I'm done this opportunities of to the kind that MEAT then you mix, have curious a putting next, portfolio? into to continuing there then consumer are opportunities build perhaps talk the consumer direct you just to Grilla, from can up there, and to about throughout And you as change good about and pitchers, continue expand big fully on market product and we Okay, eventually? think kind of job, learnings of kind also, direct mortar to brick to guys continue just and

Brian Murphy

Tough questions, Mark.

Your some be, very we to were use have and shortly organically. we we quality we're very here that I product consumer. offer expectations, comes And in have approach our So working. But we acquired Grilla interesting, fully tried marketing that, then launched very with mean, products, really the yes, it's a been has loyalty. that those. pushing products MEAT! Grilla. building learnings exceeded Maker to had it's been that embraced really see I introduce bounds And And value consumer development first, the are learned going to that they a said, unique the to like Grilla, we've you'll ton, their going Grilla And to to to unique approach

we're taking so that there Maker. implement beginning notes Your like brands, And to and for other MEAT!

So I direct-to-consumer helped And way ultimately, getting products, our making our this for in in to the involved that we that's really create brands. groundswell think consumers creates introduce process that ownership.

then learning with been begin So don't sense that don't not to careful that we've anything bundle forced. things to consumer. taken. definitely feels that a want with forcing make And very is also just We we've and the

decisions. So careful, we bundling that testing, obviously we of it's take we then make And have advertising better very whether a lot information been do AV or testing, opportunities. and

out also want there's want for take have And best question question But in brick-and-mortar well, regards Your channel, of helpful that so to two think retail I would and that's I something demand quite second and what's your as in honor of it's ultimately, into So partner don't in up can think Grilla, not as we we to offer for is that worth we neglect with to consumer. we direct-to-consumer Maker, that's built also to the well. exploring. example, do alignment the and those it's a MEAT! retail, then as things, words, want been brand, we through we bit a if our value, other

to that for careful make Certainly, Definitely. we've we're But to So doing about about? talked is sure right it want transition the that something brand. possible? what's is it be we definitely

Mark Smith

one Perfect question it's last of a and too me, don't here. think I for bad

balances as that cash great? today? more on in into turn you this you priority good of third updates opportunities? in Are more changes well you're as would reasonable? market that be Just any the seeing returning Any move down Any seeing deployment Are have you M&A valuations that quarter. cash you kind seeing shape on availability, the capital

Brian Murphy

again. Brian this is Mark, Yes,

seller ago. expectations I feel the going were bankers hesitant to year little of leverage Andy, would jump it Banks provide I companies of free reasons bringing bit looking are there's sell So, in. then several slowed volume deals that they have relates has be significantly. that, And for some to more might to that on are where for in interest as obviously, pretty terms market to think and a say up. rates to are questionable a EBITDA you'll deal

to needs reconciliation there. there so And some be

market constantly and in right with we're with speaking own pipeline we private to coming founders working particular, But that deals said, that our fewer even So now. equity on on have or businesses. do

a quite few deals. So still we quite see a

some the that surprised little few are to distressed with what alone presents And which there And I more few weeks situations have be explore to wouldn't also are those we distressed. Just companies market, experience more continue at opportunity. coming had a stations last that like. would we've we some in say converts I respect, several looking folks. bit look that

we're in too eyes effort on were distressed eye founder quickly, being maybe in more keeping companies, companies, put some but a entrepreneurial there maybe So on. we're debt cautious. situation, and an that something led to we're it your that, if are to close on is grow But much keeping And see business. partner opportunities there the on a very looking so to businesses

Operator

like question-and-answer session. back concludes to over any our This I Murphy Brian remarks. turn conference to for the closing would

Brian Murphy

Thank you, operator.

also attending participating Show in Conference. and Before let you In Street Lake Valley in of Deer we We close, Outdoor in at hope in week. events. some next we'll the connect the we'll be Conference January, I know these SHOT Vegas, be everyone be with will participating to Las upcoming want to ROTH

continues to American else future. healthy everyone next today, And give towards to exciting dedication you Brands we thanks the long-term move path special I a season. hard holidays, loyalty, work, you we speaking our As happy with to an want holiday employees and to the whose into a to on head those again and Outdoor quarter. employees forward us who we To forward wish look joined

Operator

presentation. today's for you now conference The attending Thank concluded. is

may now disconnect. You

American Outdoor Brands (AOUT) 2 Dec 222023 Q2 Earnings call transcript