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1. Company Snapshot

1.a. Company Description

Solo Brands, Inc.operates a direct-to-consumer platform that offers outdoor lifestyle branded products in the United States.The company provides camp stoves under the Solo Stove Lite brand name; fire pits under the Solo Stove brand name; grills, cook tops, and tools; kayaks under the Oru brand name; paddle boards under the ISLE brand name; and storage solutions for fire pits, firewood, and other accessories.


It also offers swim trunks, casual shorts, sport products, polos, shirts, and lounge products under the Chubbies brand name; consumables, such as color packs, starters, natural charcoal, and firewood products; and accessories comprising shelters, shields, roasting sticks, tools, paddles, and pumps under the Solo Stove, Oru, and ISLE brands.The company was founded in 2011 and is headquartered in Grapevine, Texas.

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1.b. Last Insights on DTC

Solo Brands, Inc.'s recent performance was negatively impacted by a Q4 earnings miss, with a quarterly loss of $0.09 per share, missing the Zacks Consensus Estimate of $0.12 per share. The company's struggles are compounded by a Continued Listing Standard Notice from the NYSE, citing a 30-day average closing price below $1.00 per share. Additionally, the company's DTC (Direct-to-Consumer) initiatives, a key growth driver for peers, have not yet yielded significant results.

1.c. Company Highlights

2. Chubbies and Solo Stove Parent Company Posts Mixed Q1 Results Amid Restructuring Efforts

The company reported mixed financial results for the first quarter, with net sales declining 9.5% year-over-year to $77.3 million, reflecting weakness in the Solo Stove segment. Adjusted gross profit margins compressed to 55.4% of sales, down from 59.5% in the prior year, primarily due to channel mix shifts. Despite this, the company showed progress in controlling operating expenses, with SG&A expenses decreasing $9.4 million to $39 million, driven by reduced marketing and variable costs. On the profitability front, adjusted EBITDA came in at $3.5 million, or 4.5% of sales, while the GAAP net loss narrowed significantly to $12.2 million, down 65% from the previous quarter. On a per-share basis, the company reported a loss of $0.01, in line with analyst estimates.

Publication Date: May -21

📋 Highlights
  • NYSE Trading Suspension and Appeal: - The company has appealed the NYSE suspension and is currently trading on OTC markets under DTCB, with plans to regain compliance.
  • Chubbies Segment Growth: - Chubbies sales grew 43.9% with a 26.5% EBITDA margin, driven by strong customer loyalty.
  • Solo Stove Sales Decline: - Solo Stove sales dropped $25.3 million due to reduced discounting and lack of new product launches.
  • Q1 Financial Overview: - Net sales were $77.3 million, down 9.5% year-over-year, with adjusted EBITDA of $3.5 million and a GAAP net loss of $12.2 million.
  • Strategic Initiatives and Outlook: - The company is rightsizing facilities, eliminating unprofitable marketing, and expects stabilization in H2 2025 with a focus on operational efficiency and sustainable profitability.

Chubbies Continues to Shine, Solo Stove Faces Headwinds

The Chubbies segment once again stood out as a bright spot, delivering 43.9% year-over-year sales growth and a robust 26.5% EBITDA margin, driven by strong customer loyalty. John Larson, Interim President and CEO, highlighted the segment's performance, noting, "Chubbies' ability to maintain profitability while driving growth underscores the strength of its brand and customer base." In contrast, Solo Stove sales declined $25.3 million, attributed to reduced discounting and a lack of new product launches. However, management indicated that profitability-focused changes are showing early signs of success, suggesting potential stabilization in the segment.

Strategic Initiatives and Operational Efficiency

The company outlined several strategic initiatives aimed at improving operational efficiency and regaining compliance with NYSE listing standards. These include organizational restructuring, rightsizing facilities, and eliminating unprofitable marketing programs. Larson emphasized the importance of these efforts, stating, "Our focus is on creating a more agile and profitable organization that can deliver sustainable growth." Additionally, the company announced plans to launch five new Solo Stove products this year, which could help reignite growth in the segment.

Valuation Perspective

From a valuation standpoint, the stock currently trades at a Price-to-Sales (P/S) ratio of 0.01 and an Enterprise Value-to-EBITDA (EV/EBITDA) of -1.62, reflecting significant uncertainty around the company's turnaround efforts. While the P/S ratio appears depressed, the negative EV/EBITDA highlights the challenges the company faces in generating positive earnings. With $206 million in cash and cash equivalents on hand, the company has some runway to execute its strategic initiatives, but investors will be closely watching the company's ability to stabilize operations and return to profitability.

3. NewsRoom

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Defence Therapeutics Announces Convertible Debenture Conversion

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Amer Sports Surges on Strong Q3 Results and Raised FY25 Guidance

Nov -18

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Media Giants Eye Warner Bros. Discovery as Industry Consolidation Intensifies

Nov -14

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Disney's Mixed Q4 Results: EPS Beat, Revenue Miss, and Strategic Shifts

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EdgeTI and Partners Austal USA and Sabel Systems to Showcase Advanced AI-Powered Digital Twin Capabilities at Defense TechConnect Innovation Summit (DTC), 2025

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Source: newsfilecorp.com

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On Holding Surges 19% on Strong Q3 Earnings and Raised Guidance

Nov -12

Source: gurufocus.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.54%)

6. Segments

Direct-To-Consumer Platform

Expected Growth: 15.4%

Growing demand for outdoor recreation, increasing popularity of direct-to-consumer sales, and Solo Brands' diversified portfolio of brands, including Solo Stove, Chubbies, and Oru Kayak, drive growth in the direct-to-consumer platform.

Wholesale

Expected Growth: 12.3%

Growing demand for outdoor recreation and increasing popularity of Solo Brands' products drive wholesale segment growth, with retailers seeking to stock up on camping gear and accessories.

7. Detailed Products

Solo Stove

Portable camping stove that allows for efficient and smokeless cooking

Chubbies Shorts

Comfortable and durable outdoor shorts for men and women

Oru Kayak

Lightweight and portable kayaks for easy transportation and storage

ISLE Paddleboards

High-quality and durable stand-up paddleboards for all skill levels

8. Solo Brands, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Solo Brands, Inc. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the growing demand for outdoor recreation products.

Bargaining Power Of Customers

Solo Brands, Inc. has a strong brand reputation and customer loyalty, which reduces the bargaining power of customers.

Bargaining Power Of Suppliers

Solo Brands, Inc. relies on a few key suppliers for its products, which gives them some bargaining power, but the company's strong relationships with suppliers mitigate this risk.

Threat Of New Entrants

The outdoor recreation industry is growing rapidly, and new entrants are attracted to the market, increasing the threat of new entrants for Solo Brands, Inc.

Intensity Of Rivalry

The outdoor recreation industry is highly competitive, with many established brands competing for market share, increasing the intensity of rivalry for Solo 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 39.39%
Debt Cost 7.15%
Equity Weight 60.61%
Equity Cost 16.91%
WACC 13.07%
Leverage 65.00%

11. Quality Control: Solo Brands, Inc. passed 4 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
Kirkland's

A-Score: 3.9/10

Value: 10.0

Growth: 2.1

Quality: 5.9

Yield: 0.0

Momentum: 3.0

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
CarParts

A-Score: 3.7/10

Value: 9.8

Growth: 4.0

Quality: 4.0

Yield: 0.0

Momentum: 3.0

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
Olaplex

A-Score: 3.6/10

Value: 8.0

Growth: 4.6

Quality: 5.8

Yield: 0.0

Momentum: 1.5

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
GrowGen

A-Score: 3.4/10

Value: 9.4

Growth: 2.1

Quality: 4.2

Yield: 0.0

Momentum: 3.5

Volatility: 1.3

1-Year Total Return ->

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Stock-Card
Solo Brands

A-Score: 3.4/10

Value: 10.0

Growth: 5.7

Quality: 3.7

Yield: 0.0

Momentum: 1.0

Volatility: 0.0

1-Year Total Return ->

View Full Report
Stock-Card
Beyond

A-Score: 3.2/10

Value: 8.4

Growth: 0.7

Quality: 3.4

Yield: 0.0

Momentum: 5.5

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

19.55$

Current Price

19.55$

Potential

-0.00%

Expected Cash-Flows