Clarus (CLAR) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue grew 2.5% year-over-year to $61.9 million, with gross margin expanding by 240 basis points to 36.8% and net loss narrowing to $3.3 million from $5.2 million, reflecting improved profitability and disciplined execution.

• Both Outdoor and Adventure segments contributed to growth, with Outdoor segment sales up 1.2% to $44.9 million and Adventure segment sales up 5.9% to $17.1 million, driven by strong wholesale in Australia and new international partnerships.

• Adjusted net income reached $0.7 million, or $0.02 per diluted share, compared to an adjusted net loss of $1.2 million, or $(0.03) per share, in Q1 2025.

• Board initiated a strategic alternatives review, including a potential sale of all or part of the business, retaining Jefferies LLC as financial advisor.

• Legal and regulatory expenses increased due to ongoing CPSC and DOJ matters, and restructuring charges rose as cost reduction initiatives continued.

Financial highlights

• Q1 2026 consolidated sales were $61.9 million, up from $60.4 million in Q1 2025.

• Gross margin improved to 36.8% from 34.4% year-over-year.

• Adjusted EBITDA was a $1.1 million loss (margin -1.8%), an improvement from a $1.4 million loss (margin -2.3%) year-over-year.

• Net loss for Q1 2026 was $3.3 million, improved from $5.2 million in Q1 2025.

• Free cash flow outflow was $5.7 million in Q1 2026, compared to $3.3 million outflow in Q1 2025.

Outlook and guidance

• Full-year 2026 sales guidance revised to $245–$255 million (down from $255–$265 million), with Adventure segment driving the reduction.

• Adjusted EBITDA guidance lowered to $3–$5 million (from $9–$11 million), reflecting Adventure headwinds and inclusion of legal costs.

• Q2 2026 sales expected at $51–$53 million, with adjusted EBITDA loss of ~$3 million.

• Full-year free cash flow now expected to be flat (prior: $3–$4 million).

• Management expects to incur additional restructuring costs in 2026 as cost reduction actions continue.