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1. Company Snapshot

1.a. Company Description

American Outdoor Brands, Inc.provides outdoor products and accessories for rugged outdoor enthusiasts in the United States and internationally.It offers hunting, fishing, camping, shooting, and personal security and defense products.


The company also provides shooting sports accessories products include rests, vaults, and other related accessories; outdoor lifestyle products, such as premium sportsmen knives and tools for fishing and hunting; land management tools for hunting preparedness; harvesting products for post-hunt or post-fishing activities; outdoor cooking products; and camping, survival, and emergency preparedness products.In addition, it offers electro-optical devices, including hunting optics, firearm aiming devices, flashlights, and laser grips; and reloading, gunsmithing, and firearm cleaning supplies.The company sells its products through e-commerce and traditional distribution channels under the Adventurer, Harvester, Marksman, and Defender brand lanes.


American Outdoor Brands, Inc.was incorporated in 2020 and is headquartered in Columbia, Missouri.

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1.b. Last Insights on AOUT

American Outdoor Brands' recent performance was negatively impacted by a high valuation, with a price-to-earnings ratio of 22x FY26E earnings, making it vulnerable to a potential recessionary environment. The company's premium pricing strategy, which appeals to a niche market, may be exposed to high inflation. Additionally, the Leisure and Recreation Products industry faces challenges due to an uncertain economy, which may affect the company's sales and revenue growth.

1.c. Company Highlights

2. American Outdoor Brands Posts Beat in Q2 FY2026 Amidst Challenging Retail Landscape

American Outdoor Brands reported a 5% decrease in net sales to $57.2 million in the second quarter of FY2026, with earnings per share (EPS) coming in at $0.29, beating analyst estimates of $0.17. The gross margin remained strong at 45.6%, despite the impact of clearing slow-moving inventory. The company's adjusted EBITDA was $6.5 million, down slightly from the prior year. The results were achieved despite a dynamic retail backdrop, with the company highlighting the strength of its growth brands, particularly BOG, Meat, and Bubba.

Publication Date: Dec -20

📋 Highlights
  • Q2 Exceeded Expectations with Strong POS Growth: Despite a dynamic retail environment, total POS increased 4% YoY, driven by BOG, Meat, and Bubba brands.
  • Channel Performance Shift: Traditional retail (65% of business) saw +2.3% sales growth, while e-commerce (35%) declined 15.9% due to reduced online-only exposure.
  • Financial Resilience with Gross Margin Stability: Net sales fell 5% to $57.2M, but gross margin held at 45.6%, and adjusted EBITDA reached $6.5M despite inventory clearance costs.
  • Guidance for FY2026: Full-year net sales decline of 13–14% (5% underlying), with adjusted EBITDA targeting 4–4.5% of sales, below long-term 25–30% EBITDA goals.
  • Tariff Mitigation and M&A Outlook: Tariff costs (capitalized since March) will impact Q3–Q4 2026, but full offset expected by FY2027, alongside increased M&A activity due to market shifts.

Revenue and Margin Performance

The company's revenue decline was largely driven by a 15.9% decrease in e-commerce channel sales, which make up 35% of the business. In contrast, the traditional channel, which accounts for 65% of the business, saw sales increase by 2.3%. The company's gross margin was supported by its pricing actions and cost concessions, although the impact of tariffs was a headwind. As Brian Murphy, President and CEO, noted, "We've offset all the tariff impact with mitigation efforts, and we expect to fully offset all the tariffs in 2027."

Operating Expenses and Cash Flow

The company's operating expenses decreased by $1.8 million, driven by lower variable costs and intangible amortization. Operating cash outflow was $13 million, reflecting an increase in accounts receivable. The company ended the quarter with $3.1 million in cash and no debt, with a total available capital of $93 million. The company's adjusted EBITDA margin was 11.4%, indicating a relatively healthy profitability level.

Outlook and Valuation

For FY2026, the company expects net sales to decline 13% to 14% year over year, although the underlying net sales decline would be 5% adjusting for orders accelerated into the prior year. The company's guidance for adjusted EBITDA is 4% to 4.5% of net sales. With a current P/E Ratio of -19.08 and an EV/EBITDA ratio of 31.14, the market appears to be pricing in significant challenges for the company. However, with a P/S Ratio of 0.52 and a P/B Ratio of 0.62, the stock may be undervalued relative to its sales and book value.

Growth Prospects and M&A

3. NewsRoom

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American Outdoor Brands (NASDAQ:AOUT) Trading Up 0.6% – Here’s What Happened

Jan -28

Source: defenseworld.net

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American Outdoor Brands (NASDAQ:AOUT) and Sportradar Group (NASDAQ:SRAD) Head-To-Head Review

Jan -20

Source: defenseworld.net

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Revolutionary Caldwell Clays™ App Gives Consumers 'A New Way to Clay™'

Jan -19

Source: prnewswire.com

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Caldwell® Claymore Connect™ Delivers A New Way to Clay™

Jan -19

Source: prnewswire.com

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Caldwell® Expands the ClayCopter™ Platform with a New Family of Products

Jan -19

Source: prnewswire.com

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Head-To-Head Review: American Outdoor Brands (NASDAQ:AOUT) and Marine Products (NYSE:MPX)

Jan -06

Source: defenseworld.net

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American Outdoor POS To Sales Gap Widens, Potentially Signaling A Bullwhip Ahead

Dec -11

Source: seekingalpha.com

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American Outdoor Brands: Why I Believe The Risk/Reward Is Tilting Positive

Dec -11

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.82%)

6. Segments

Traditional Channels

Expected Growth: 9%

American Outdoor Brands, Inc.'s Traditional Channels segment growth of 9% is driven by increased demand for firearms and outdoor products, strategic partnerships, and expanded distribution networks. Additionally, the company's focus on product innovation, marketing efforts, and e-commerce platform enhancements have contributed to the growth.

E-commerce Channels

Expected Growth: 13%

American Outdoor Brands, Inc.'s 13% growth in e-commerce channels is driven by increasing online demand for outdoor gear and accessories, effective digital marketing strategies, and seamless online shopping experiences. Additionally, the company's strong brand portfolio, including Smith & Wesson and M&P, contributes to its online success.

7. Detailed Products

Firearms

American Outdoor Brands, Inc. offers a wide range of firearms, including handguns, rifles, and shotguns, under its Smith & Wesson brand.

Outdoor Products and Accessories

The company provides a variety of outdoor products and accessories, such as tree stands, blinds, and game cameras, under its Caldwell and Wheeler brands.

Cutlery and Tools

American Outdoor Brands, Inc. offers a range of cutlery and tools, including knives, multi-tools, and flashlights, under its M&P and Bubba brands.

Electro-Optics

The company provides electro-optic products, including riflescopes, binoculars, and spotting scopes, under its Crimson Trace brand.

Reloading and Accessories

American Outdoor Brands, Inc. offers reloading equipment and accessories, including reloading presses, dies, and accessories, under its Thompson/Center Arms brand.

8. American Outdoor Brands, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

American Outdoor Brands, Inc. faces moderate threat from substitutes, as consumers have alternative options for outdoor gear and apparel from other manufacturers.

Bargaining Power Of Customers

American Outdoor Brands, Inc. has a diverse customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.

Bargaining Power Of Suppliers

American Outdoor Brands, Inc. relies on a network of suppliers for raw materials and components, giving them some bargaining power, but the company's scale and diversification mitigate this risk.

Threat Of New Entrants

The outdoor gear and apparel industry has high barriers to entry, including significant capital requirements, established distribution networks, and strong brand recognition, making it difficult for new entrants to compete with American Outdoor Brands, Inc.

Intensity Of Rivalry

The outdoor gear and apparel industry is highly competitive, with many established brands competing for market share, leading to intense rivalry and pricing pressure for American Outdoor Brands, Inc.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 13.36%
Debt Cost 3.95%
Equity Weight 86.64%
Equity Cost 5.64%
WACC 5.41%
Leverage 15.42%

11. Quality Control: American Outdoor Brands, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Johnson Outdoors

A-Score: 5.8/10

Value: 8.9

Growth: 3.2

Quality: 3.5

Yield: 5.0

Momentum: 8.0

Volatility: 6.0

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JAKKS Pacific

A-Score: 4.5/10

Value: 6.3

Growth: 4.4

Quality: 4.6

Yield: 6.0

Momentum: 1.5

Volatility: 4.0

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Vista Outdoor

A-Score: 3.7/10

Value: 3.2

Growth: 4.9

Quality: 5.3

Yield: 0.0

Momentum: 6.0

Volatility: 2.7

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Stock-Card
American Outdoor Brands

A-Score: 3.6/10

Value: 8.1

Growth: 4.2

Quality: 4.6

Yield: 0.0

Momentum: 1.0

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Xponential Fitness

A-Score: 3.5/10

Value: 8.5

Growth: 5.7

Quality: 5.2

Yield: 0.0

Momentum: 0.5

Volatility: 1.3

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Inspirato

A-Score: 3.4/10

Value: 9.5

Growth: 2.6

Quality: 4.7

Yield: 0.0

Momentum: 2.5

Volatility: 1.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.92$

Current Price

8.92$

Potential

-0.00%

Expected Cash-Flows