Roots (ROOT) Q2 2026 earnings summary

Executive summary

• Q2 2025 sales reached $50.8 million, up 6.3% year over year, with direct-to-consumer comparable sales up 17.8%, the highest since IPO, and marking the fourth consecutive quarter of growth in sales, gross margin, and adjusted EBITDA.

• Growth was driven by omnichannel strategy, product innovation, and high-profile brand collaborations, with strong brand momentum and customer engagement.

• Lifestyle, active, and sweats categories all grew, supported by the launch of the Rome/Roam Collection and major collaborations.

• Brand ambassador program doubled in size, and new flagship stores in Vancouver and Mount Tremblant contributed to sales momentum and enhanced customer engagement.

• Positive trends continued into the first five weeks of Q3, including the back-to-school period.

Financial highlights

• Total sales increased to $50.8 million from $47.7 million in Q2 2024, a 6.3% rise; DTC sales grew to $41.0 million, up 12.7% year over year.

• Gross profit rose 14.5% to $30.8 million, with gross margin expanding 430 basis points to 60.7%.

• Net loss improved 16.1% to $4.4 million, and adjusted EBITDA loss improved 32% to $2.1 million.

• Net loss per share improved to $(0.11) from $(0.13) year over year; adjusted net loss per share improved to $(0.09) from $(0.11).

• Free cash outflow was $6.9 million, improving from $9 million last year; net debt reduced 6.5% to $38.1 million.

Outlook and guidance

• Positive sales trends continued into early Q3, including the back-to-school period.

• Inventory levels and liquidity are strong, positioning the company well for the fall/holiday season.

• Elevated marketing investments will continue through the rest of the year to drive brand awareness and sales.

• Focus remains on executing strategic initiatives, driving operating leverage, and sustainable, profitable growth.