Clarus (NASDAQ:CLAR) reported higher second-quarter sales and improved underlying margins as its Outdoor segment gained momentum, while the company’s Adventure segment faced continued demand pressure in North America and Australia.
Consolidated second-quarter sales for the period ended June 30 rose 1.6% to $56.2 million from $55.2 million a year earlier. Outdoor sales increased 8.5% on a reported basis, while Adventure sales declined 11.9%. The company reported adjusted EBITDA of $7.6 million, representing a 13.6% margin, aided by tariff refunds received by the Outdoor business.
Outdoor Segment Posts Growth Across Core Categories
Black Diamond Equipment President Neil Fiske said Outdoor revenue, margin and EBITDA each improved from the prior-year quarter. Excluding the previously divested PIEPS business from the comparison, Outdoor revenue increased 9.1%, led by growth across regions and the company’s Mountain, Climb and Apparel categories.
The three categories represented 95% of Outdoor segment revenue and collectively grew 9.5% during the quarter. Mountain revenue increased 7.4%, Climb sales rose 13.5%, and Apparel revenue was up 7.4%.
Fiske highlighted Apparel as a long-term strategic focus for the company. Inline Apparel sales increased 22.9%, while clearance and discontinued merchandise sales fell 61%, which he said reflected a shift toward a healthier full-price business and reduced markdown activity.
Outdoor gross margin was 52.0%, compared with 34.9% a year earlier, including $6.1 million in tariff refunds recognized as a reduction in cost of goods sold. Excluding the refund, Outdoor gross margin improved 160 basis points to 36.5%, driven by inventory quality, product mix, less discounting and a more premium full-price model, according to Fiske.
Outdoor adjusted EBITDA was $9 million. Excluding the tariff refund and a $1.4 million benefit related to Consumer Product Safety Commission legal adjustments, adjusted EBITDA would have been $1.5 million, compared with $0.3 million in the prior-year period.
Inventory at Outdoor ended the quarter at $72.2 million, up 12% from a year earlier, which Fiske said reflected business growth and preparations for an expected strong second half.
- North American wholesale revenue increased 0.5%, following 4.8% growth in the first quarter.
- North American digital direct-to-consumer revenue rose 5.7% and represented 17.7% of regional revenue.
- European wholesale revenue increased 25.3% in dollars, or 16.7% in constant currency.
- European digital direct-to-consumer revenue declined 10.6% in constant currency as the company reduced promotional and less-profitable transactions.
- International distributor revenue increased 10.6%.
Fiske said the company remains confident in its fall order book and outlook for the second half, although he described the Middle East conflict as a significant geopolitical and business risk. Addressing concerns about a potentially warm winter, he said any impact on Black Diamond’s outlook had been modest so far.
Adventure Sales Decline but Margins Improve
CFO Michael Yates said Adventure’s second-quarter sales fell short of expectations amid difficult markets in North America and Australia. Efforts to reach new customers in North America did not meet expectations, though RockyMounts continued to show solid demand.
Australia performed better than management had forecast despite higher fuel prices and elevated interest rates. Meanwhile, Adventure reported double-digit revenue growth in France, Germany, the United Kingdom and Japan. Yates said the sales decline appeared to be market-driven rather than share-driven.
Adventure gross margin increased 420 basis points from the prior-year period to 41.5%. SG&A expense declined by $0.6 million, while headcount was reduced 20% and the cost base was lowered 11%, according to Yates. The segment generated adjusted EBITDA of $0.5 million.
During the quarter, Clarus acquired certain assets and liabilities of ONWRD Supply Co., an in-vehicle accessories business. Yates said the acquisition adds high-margin products and new SKUs to Adventure’s portfolio. The company also expects to launch a new series of Rhino-Rack legs in September and said its recently introduced MAXTRAX integrated shovel has exceeded sales forecasts in every market.
Guidance Raised for EBITDA
Clarus maintained its full-year 2026 revenue outlook of $245 million to $255 million. The company expects approximately $68 million of revenue from Adventure and approximately $182 million from Outdoor.
Management raised its full-year adjusted EBITDA forecast to $12 million to $13 million, from prior guidance of $3 million to $5 million. Yates said the revision primarily reflected the $6 million tariff refund benefit and the elimination of an estimated $2 million in legal expenses expected for the remainder of the year.
For the third quarter, Clarus expects sales of $66 million to $68 million and adjusted EBITDA of approximately $3 million. Yates said investors could model Adventure gross margin at roughly 40% in the second half and Outdoor gross margin, excluding tariff effects, at about 37% to 37.5%.
Free cash flow was $0.6 million in the second quarter, compared with an $11.3 million outflow a year earlier. Clarus ended the quarter with no debt and $28.9 million in cash and cash equivalents, compared with $36.7 million at the end of 2025.
The company repurchased 153,331 shares during the quarter for approximately $448,000, or $2.92 per share. Kanders said approximately $42.4 million remained available under Clarus’ $50 million share repurchase authorization.
Strategic Review and Legal Updates
Kanders said Clarus continues to evaluate strategic alternatives intended to unlock shareholder value, with Jefferies serving as financial adviser. Potential actions may include a sale of all or part of the business or other strategic or financial transactions. The company said it would not comment further on the process unless additional disclosure becomes appropriate or required.
Yates also said the Department of Justice informed Clarus and Black Diamond on June 4 that it had closed its criminal investigation involving Black Diamond’s reporting obligations related to certain avalanche transceivers. The CPSC had previously closed, without further action, a separate investigation concerning whether Black Diamond sold products subject to a recall.
About Clarus (NASDAQ:CLAR)
Clarus Corporation (NASDAQ: CLAR) is a global designer, manufacturer and marketer of outdoor recreation equipment. The company’s portfolio of brands serves enthusiasts across climbing, skiing, trail running, paddling and snow safety, combining purpose-driven innovation with in-house manufacturing capabilities. Clarus focuses on high-performance gear developed to meet the demands of professional athletes and recreational users alike.
The company’s flagship brand, Black Diamond Equipment, offers climbing protection, apparel, ski bindings and accessories engineered for backcountry and alpine environments.
