Solo Brands (DTC) Q2 2025 earnings summary

Executive summary

• Leadership changes included John Larson as permanent CEO and Liz Van Zuren as CMO, with a focus on marketing efficiency and profitability.

• Net sales declined to $92.3M for Q2 2025, down 29.9% year-over-year, mainly due to Solo Stove weakness, partially offset by Chubbies growth.

• Achieved positive operating cash flow of nearly $11 million in Q2 2025, emphasizing a shift to a structurally smaller, profit-driven model.

• Debt refinancing, removal of going concern disclaimer, and NYSE reinstatement with a new ticker symbol, SBDS, were completed.

• Significant restructuring, contract termination, and impairment charges of $10.3M were incurred in Q2 2025, with a 1-for-40 reverse stock split to regain NYSE compliance.

Financial highlights

• Q2 2025 net sales were $92.3 million, down 29.9% year-over-year, but up 19.4% sequentially from Q1.

• Gross profit was $56.6 million (61.3% margin), down 150 bps; adjusted gross profit margin was 61.7%.

• Adjusted EBITDA was $10.5 million (11.4% margin), nearly matching last year’s margin despite lower sales.

• Adjusted net income was $1 million, while GAAP net loss was $20.8 million (22.5% of sales).

• Cash and equivalents at June 30, 2025: $18.1 million; inventory reduced to $84.1 million.

Outlook and guidance

• Management expects continued cost-saving initiatives and operational improvements, with more predictable revenue cadence post-2025 as new product launches accelerate.

• Tariff impacts anticipated in the second half of 2025, but cost structure adjustments are expected to mitigate effects.

• The company anticipates compliance with amended credit covenants and sufficient liquidity for at least the next twelve months.