Solo Brands Stock Dives After Mixed Q4 Results, But Retail’s Hopeful About Turnaround
Net sales of its Chubbies brand increased to $24.2 million, up 12.2% year-over-year driven primarily by increased demand within the retail net sales channel.
FollowShares of Solo Brands Inc. (DTC) plummeted more than 63% on Thursday after the company’s lackluster fiscal fourth-quarter earnings, with retail sentiment turning downbeat.
For Q4, the company posted earnings per share of $0.03, worse than the $0.12 that analysts predicted. Revenue stood at $143.54 million, below the consensus estimate of $163.19 million.
Net sales decreased 13.2% year-over-year due to declines in both retail and direct-to-consumer (D2C) channels within the Solo Stove segment, offset by an increase in net sales in the Chubbies segment, the company said.
For Chubbies, its net sales increased to $24.2 million, up 12.2% year-over-year and driven primarily by increased demand within the retail net sales channel.
“As a part of our transformation plan, we hired external financial advisors to help us go through every line item of the business. Notwithstanding challenging results, Solo Brands has a solid foundation for success, including great ‘enthusiasts’ brands, a pipeline of new products and highly loyal customers,” said John Larson, Interim president and CEO.
Larson recently took over from Chris Metz, who stepped down from his position in February.
Retail sentiment on Stocktwits, however, improved to ‘bullish’ from ‘extremely bearish,’ with message volumes surging to ‘extremely high’ levels.
Bearish watchers flagged concerns surrounding the new tariffs.
Following the earnings, Canaccord downgraded Solo Brands to ‘Hold’ from ‘Buy’ with a price target of $1, down from $3, The Fly reported.
Canaccord said it "strongly" believes the underlying assets of Solo Stove and Chubbies are undervalued but warned against the management reshuffle, calling it a “revolving door.”
The company also gave an update from its previous filing, addressing doubts about its operations as a going concern.
“We are evaluating strategies to refinance our existing debt, and our plans are focused on improving our results and liquidity through a variety of operational improvements throughout 2025,” the company said.
Solo Brands operates a portfolio of lifestyle brands in the outdoor and apparel sectors. Its brands include Solo Stove, Chubbies, ISLE, and Oru.
Solo Brands stock is down 79% year-to-date.
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