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% a year ago, and the company noted gross margin benefited from about $2.4 million of out-of-quarter IEEPA tariff refunds. Adjusted EBITDA was $13.5 million, up 28.6% from $10.5 million, and the margin was 15.3%. Net loss attributable to Solo Brands was $4.4 million versus a $13.5 million loss last year; adjusted net income was $3.9 million. SG&A was $42.6 million, down 10.6%, and operating expenses were down 25.5% year over year. International sales increased 46% to $9.8 million. The company generated more than $36 million of operating cash flow, ended with $35.4 million of cash and cash equivalents, and had no outstanding revolver borrowings. Management did not give formal revenue or EPS guidance, but said Q3 trends were softer after June and July, while full-year growth investment is expected to be about $2 million to $3 million, mainly for product innovation.

John Larson framed the quarter as a mix of softer top-line performance and meaningful progress on profitability, cash generation, and portfolio diversification. He said the company is focused on three growth priorities: product innovation, higher-return channels and products, and international expansion. His tone was constructive and disciplined, emphasizing a leaner operating model, stronger brand momentum in certain areas like Watersports and international, and a multiyear transformation still in progress.

Laura Coffey highlighted the operational restructuring: Solo Brands is cutting its U.S. distribution footprint from 5 facilities in 2025 to 1 beginning in the fourth quarter, and it closed two facilities during the quarter, including the Oru manufacturing facility in Mexico. She said these actions, along with earlier personnel and compensation changes, should lower the cost structure until they anniversary next year. On the financial side, she pointed to $2.4 million of IEEPA tariff refunds, gross margin of 59.9%, SG&A of $42.6 million, more than $36 million of operating cash flow, $35.4 million of cash, no revolver borrowings, and compliance with all financial covenants as of June 30.

The main analyst question focused on gross profit adjustments and whether the tariff refund and Mexico shutdown write-off mostly offset each other; management said the $1.5 million of 2025-related tariff benefit and the $1.4 million inventory write-off largely offset. A second question asked about the international strategy and how management views it from both revenue and margin perspectives. John Larson said international is an underpenetrated opportunity, that growth will be lumpy as new partners are added, and that direct shipping into some markets can be favorable for gross margin because it reduces exposure to U.S. tariff issues, even if distribution partners add expense.