Clarus NASDAQ: CLAR reported first-quarter 2026 results that management said reflected continued execution of its “simplification strategy,” including a greater focus on core, higher-margin products and tighter cost control across its Outdoor and Adventure segments.
Executive Chairman Warren Kanders told investors the company grew revenue and adjusted EBITDA year-over-year and expanded consolidated gross margin by 240 basis points despite ongoing geopolitical and macro uncertainty in the global outdoor market. Kanders also announced Clarus has initiated a review of strategic alternatives, saying the board does not believe the company’s stock price reflects “the sum of the part value of our two segments or the long-term potential of our businesses.”
Strategic alternatives review announced
Kanders said Clarus has retained Jefferies LLC as financial advisor and will evaluate options that could include “the sale of all or part of the business or other strategic or financial transactions involving the company.” He added the review will run in parallel with continued execution of the simplification strategy, and said the company would not answer questions about the process until further disclosure is appropriate or required.
Outdoor segment: core categories grow, margins improve
President of Black Diamond Equipment Neil Fiske said the Outdoor segment delivered “solid results” in the quarter, with revenue, margin, and EBITDA all ahead of the prior year. His comments excluded the divested PIEPS business from the prior-year comparison.
Fiske said Outdoor revenue rose 5.4% year-over-year, with “go-forward” categories up 7%. He said the company’s “big three” business units—mountain, climb, and apparel—were up 6.7% and now represent more than 90% of total Outdoor revenue. By category, Fiske reported mountain revenue rose 7.7%, climb increased 6.6%, and apparel rose 4.3% as the company lapped “the high level of clearance on PFAS inventories from the prior year.” He added full-price apparel sales were up 10.1%.
Outdoor gross margin improved 190 basis points year-over-year, which Fiske attributed to improved inventory quality, a focus on more profitable categories, and “less discounting” as the business shifts toward “a more full price premium business model.”
On costs, Fiske said operating expenses excluding restructuring increased 11.6% and included $802,000 of Consumer Product Safety Commission (CPSC) legal costs and $425,000 in consulting work tied to improving European logistics and profitability. Outdoor restructuring costs were $793,000 in the quarter, reflecting actions taken in late 2025 and early 2026 including headcount reductions, a store closure, and reducing the athlete roster. Fiske said the company does not anticipate additional restructuring or consulting costs in 2026.
Outdoor adjusted EBITDA was $1.4 million, up 15.2% year-over-year, and included the CPSC legal costs and Europe consulting expense, according to Fiske.
Inventory ended the quarter at $61.9 million, up 10% year-over-year, which Fiske said reflected higher tariff costs in the company’s cost base and “strategic investments” in key franchise styles to support demand. On tariffs, he said Black Diamond could see some benefit from a “new tariff schedule” following a Supreme Court ruling, though tariffs remain subject to review and change. He also cited cost pressure from the war in Iran across materials and logistics.
“At this still uncertain stage,” Fiske said lower tariffs and higher factor costs “roughly cancel each other out for the balance of the year,” but added that a prolonged conflict could lead to further factor price increases and potential price increases beginning in July 2026 to protect margins. He also said Black Diamond has filed to claim a tariff IEEPA credit estimated at $6.2 million, subject to approval.
By region and channel, Fiske said North America wholesale grew 4.8%, while North America digital direct-to-consumer (18.2% of regional revenue) declined 9.7% due to less promotional and clearance activity. EU wholesale rose 16.2% in dollars and 4.9% in constant currency, while EU digital D2C (5.3% of regional revenue) declined 43.6% in constant currency as the company reduced promotions and “less profitable transactions.” The international distributor channel increased 7.9%.
Adventure segment: profitability improves, but Australia demand weakens in April
CFO Mike Yates said the Adventure segment showed “incremental progress” after several quarters of corrective actions. Adventure revenue increased 5.9% in the first quarter, driven by strong growth in Australia and new partner relationships in Japan, Scandinavia, China, and the U.K., partially offset by a slow start in the Americas.
Adjusted EBITDA in Adventure improved to a $200,000 profit from a $200,000 loss a year earlier, Yates said. He also reported Adventure gross margin rose 260 basis points, driven by “price capture, customer mix, and improved terms.”
Yates said the second quarter will be the first full quarter with MAXTRAX and Rhino-Rack operations consolidated under one roof in Australia. He highlighted a $600,000 MAXTRAX order from a large Australian automotive parts and accessories retailer to be invoiced in the second quarter, and said sales of the MAXTRAX MKII board were up 22% year-over-year. He also called RockyMounts a “bright spot,” citing 111 new U.S. bike shop placements representing about $500,000 in first-quarter revenue and “positive signs” of traction in Australia.
However, Yates warned the outlook for the remainder of 2026 is “challenging” due to geopolitical and macro factors, including weaker consumer conditions in Australia. He said that beginning in April, several retail accounts reported significantly reduced demand expectations, citing higher energy prices tied to the war in Iran. Some partners are indicating a decline of 30% in the Australian market compared with last year, he said, adding that consumer sentiment is negative and retailer inventory is growing as demand slows.
In response, Yates said management is focused on margin expansion, cost discipline, and operational efficiency. He said initiatives include U.S. expansion through new RockyMounts storefronts and increased Rhino-Rack and MAXTRAX penetration across Asia, Europe, and the U.K.
Consolidated results, guidance lowered as legal costs included and Adventure outlook shifts
For the first quarter, Clarus reported consolidated sales of $61.9 million, up from $60.4 million a year earlier. Yates said the increase was driven by a favorable wholesale market in Australia for Rhino-Rack and MAXTRAX and higher global wholesale and distributor revenue in Outdoor, partially offset by lower PIEPS revenue due to its sale and lower global D2C revenue.
Consolidated gross margin was 36.8% versus 34.4% a year ago, driven by higher volume and favorable product mix in both segments, Yates said. He reported Outdoor gross margin was 36.0% versus 33.8%, and Adventure gross margin was 38.8% versus 36.2%.
SG&A expense was flat at $26.6 million. Yates said lower marketing and other expense reductions and the removal of PIEPS costs were offset by higher outside service expenses.
Adjusted EBITDA was a loss of $1.1 million, or negative 1.8% margin. Yates said that starting in the first quarter of 2026, Clarus will no longer add back costs related to the Section 16(b) litigation and the CPSC/DOJ matters in its adjusted EBITDA metric. Those legal costs totaled $1.4 million in the first quarter. He said adjusted EBITDA would have been positive $300,000 in the quarter under the prior approach. Segment adjusted EBITDA was $200,000 for Adventure and $1.4 million for Outdoor, with adjusted corporate costs of $2.8 million that included $600,000 of legal and regulatory expenses.
Free cash flow was a $5.7 million outflow versus a $3.3 million outflow in the prior-year quarter. Clarus ended the quarter with no debt and $29.8 million in cash and cash equivalents, down from $36.7 million at year-end 2025.
Yates said Clarus revised full-year 2026 guidance to sales of $245 million to $255 million and adjusted EBITDA of $3 million to $5 million. He attributed the revenue reduction at the midpoint—from $260 million to $250 million—entirely to the Adventure segment, with expected full-year Adventure revenue of about $70 million and Outdoor revenue remaining at $180 million. He also said the adjusted EBITDA guide was reduced from $9 million to $11 million to $3 million to $5 million, reflecting both lower Adventure profitability from the revenue reduction and the decision to include ongoing legal and regulatory costs in adjusted EBITDA. Yates said the company has included about $1 million per quarter in legal costs for each of the remaining three quarters of 2026 related to the Section 16 matter and the CPSC and DOJ matters.
For the second quarter, Clarus expects sales of $51 million to $53 million and adjusted EBITDA of approximately a $3 million loss, Yates said.
Legal matters: appeals process ongoing, DOJ investigation continues
Yates provided updates on litigation and regulatory matters. He said Clarus is awaiting a decision from the Second Circuit Court of Appeals in its lawsuit against HAP Trading LLC and Harsh A. Padia for disgorgement of short-swing profits, after oral argument was held on Feb. 12, 2026. He noted the SEC declined to file an amicus brief after being invited by the court.
He also said Clarus settled its lawsuit against Caption Management and related entities on Feb. 24, 2026, with payment received on March 2, 2026 for an undisclosed amount and mutual releases. Yates added that a duplicative shareholder action was dismissed, but the plaintiff’s lawyer has sued for legal fees.
On the CPSC and DOJ matter related to Black Diamond avalanche beacons, Yates said the unresolved fine matter was referred to the DOJ in late 2024 and that the DOJ has not pursued a civil lawsuit to date. He said the DOJ served grand jury subpoenas in early 2025 as part of a criminal investigation, and that Clarus has cooperated and produced substantially all requested documents. He also said the DOJ has sent letters to two former Black Diamond executives advising they are targets, has served subpoenas for grand jury testimony on a current and a former employee, and recently interviewed a former quality assurance director while requesting an interview with his successor.
During Q&A, Fiske said the Outdoor consumer in North America has been “hanging in there” through April, citing sell-through strength and results at key accounts, while emphasizing the risk of a prolonged conflict and higher gasoline prices. Yates reiterated that Australia has seen a sharper slowdown since April, which the company expects to reduce Adventure segment revenue by about $10 million for the remainder of 2026.
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.
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