Solo Brands, Inc.

Second-quarter consolidated net sales were $88.5 million, down 4.1% year over year. Gross margin was 59.9% versus 61.3% in the prior-year quarter. SG&A was $42.6 million, down 10.6% year over year. Net loss attributable to Solo Brands was $4.4 million versus a $13.5 million net loss a year ago, while adjusted net income was $3.9 million versus essentially break-even last year. Adjusted EBITDA was $13.5 million, up 28.6% from $10.5 million, with a 15.3% margin. Operating cash flow was more than $36 million, cash and cash equivalents were $35.4 million, and revolver borrowings were zero. For the quarter, international sales increased 46% to $9.8 million. Management did not provide formal next-quarter or full-year revenue/EPS guidance in the prepared remarks, but said growth investments this year should be about $2 million to $3 million, mainly for product innovation.

John Larson emphasized that the company is making progress on profitability and cash generation even though sales were not where management wanted them to be. He pointed to innovation, higher-return channels, and international expansion as the three pillars for top-line growth, and said the business is becoming leaner and more disciplined. His tone was constructive but candid: he acknowledged June softness and said the international opportunity is real but will take time.

Laura Coffey highlighted several balance-sheet and cost-structure improvements: lower SG&A from cost actions, operating cash flow of more than $36 million, no revolver borrowings, and $35.4 million of cash at quarter end. She also said the company closed two facilities, is transitioning Oru fulfillment to Texas, and expects to reduce the U.S. distribution footprint from 5 facilities in 2025 to 1 beginning in the fourth quarter. Gross margin was 59.9%, with a benefit from approximately $2.4 million of out-of-quarter IEEPA tariff refunds, partially offset by a $1.4 million raw material inventory write-off tied to the Mexico shutdown.

The main analyst question focused on how to think about gross profit adjustments and the economics of international expansion. Laura clarified that gross profit had a $2.4 million tariff refund benefit, with only about $900,000 tied to 2025 and the rest to Q1, while the Mexico inventory write-off was about $1.4 million, so the items largely offset. John said international is an underpenetrated opportunity, described recent wins in India, Europe, the U.K., Asia, and South America, and said the new partners should support growth even if the ramp is lumpy. He also said international can be favorable on gross margin because direct shipment avoids some U.S. tariff issues, though distribution partners add cost.