Leatt Q3 Earnings Call Highlights

Key Points

• Leatt posted its strongest quarterly revenue in four years: Third-quarter revenue rose 43% to $20.46 million, while net income increased to $2.2 million from $540,000 a year earlier. Some distributor shipments shifted from Q2 to Q3, and tariff recoupments also supported results.
• Growth spanned key product categories and regions: Body armor sales rose 48% to $9.03 million and helmet sales climbed 68% to $5.58 million; international revenue increased 50%, outpacing 24% growth in the U.S. Tariff recoupment of $500,000–$600,000 boosted gross margin by about two percentage points.
• Management sees continued opportunity but flagged uncertainty: Initial dealer uptake for the new GRiTT care-product line exceeded expectations, and the company expects adventure products to gain share. Leatt said it was on track for a solid 2026, while acknowledging potential geopolitical headwinds.

Leatt OTCMKTS: LEAT reported its highest quarterly revenue in four years as sales of helmets, body armor and other riding products helped drive a 43% increase in third-quarter revenue.

Revenue for the quarter ended Sept. 30 rose to $20.46 million from $14.34 million a year earlier. Net income increased to $2.2 million, or $0.34 per diluted share, from $540,000, or $0.08 per diluted share, CEO Sean MacDonald said on the company’s Nov. 12 earnings call.

Results benefited in part from shipments to distributors that had been expected in the second quarter but moved into the third, as well as the recoupment of U.S. import tariffs. MacDonald said sales to global distributors rose 52% in the third quarter; across the second and third quarters combined, distributor sales increased approximately 22%.

Product and sales growth

Leatt’s largest product category, body armor, generated $9.03 million in quarterly sales, up 48% from a year earlier. The category includes upper-body and limb protection, motorcycle and adventure riding boots, and mountain bike shoes. MacDonald said footwear volume rose 88%.

Helmet sales climbed 68% to $5.58 million, supported by a 93% increase in the volume of off-road motorcycle, adventure and mountain bike helmets sold. Sales of other products, parts and accessories rose 26% to $5.1 million. Neck brace sales fell 12% to $750,000 following a strong prior-year quarter.

U.S. revenue increased 24% to $5.33 million, while international revenue rose 50% to $15.12 million. Dealer-direct revenue grew 24%, and consumer-direct sales increased 25%, following 61% growth in the same quarter of 2025.

Asked about the slower consumer-direct growth rate, MacDonald said the channel remained a priority and that pricing, marketing and product availability all influence sales. He said he expects strong double-digit growth in the channel to continue.

Tariff recoupment lifts profit

Gross profit increased 48% in the third quarter, partly because of tariff recoupment. MacDonald estimated that $500,000 to $600,000 in tariffs came back during the quarter, benefiting margins by about two percentage points.

Excluding that benefit, he said, gross margin was roughly in line with the prior year despite pressure from higher shipping costs. The company’s net margin improved to 10.8% from 3.8%, while operating costs fell to 32% of revenue from 40% as sales grew faster than expenses.

For the first nine months of 2026, revenue rose 23% to $56.36 million and net income increased 74% to $4.88 million. Gross margin for the period improved to 45% from 43% a year earlier.

GRiTT rollout and demand outlook

Leatt has begun shipping GRiTT, its new bike and rider care product line, internationally. MacDonald said products were available in some European countries and the U.K., with U.S. stock expected to arrive within a couple of weeks of the call, followed by a full U.S. launch.

Initial shipments exceeded the company’s expectations, he said, and dealer uptake had been strong. Leatt plans to report GRiTT sales within its other products, parts and accessories category while providing updates on the line’s progress.

MacDonald said adventure riding products currently account for approximately 16% to 18% of revenue, slightly above the level discussed by an investor on the call. He expects the segment to grow faster than some other categories and represent a larger share of sales over time.

On distributor and dealer inventory, MacDonald characterized 2025 as a restocking year for much of the industry. He said current ordering patterns reflect participation, demand and sales through to riders, though he did not quantify how much growth came from end-market demand.

Cash and investment

Cash, cash equivalents and restricted cash totaled $15.5 million at Sept. 30, up $2.27 million from year-end. Operating cash flow for the first nine months was $4.59 million, compared with $1.45 million a year earlier. Inventory declined $1.6 million from year-end, although MacDonald said it increased from the end of the second quarter as the company invested in inventory to support distributor sales.

Leatt repurchased approximately $182,000 of stock during the first nine months under its previously announced program authorizing up to $750,000 in repurchases. MacDonald said the company is considering how to use its working capital, including maintaining appropriate inventory levels for GRiTT.

MacDonald said Leatt was on track for a solid 2026 and remained optimistic about demand, while noting the potential for geopolitical headwinds.

About Leatt (OTCMKTS:LEAT)

Leatt Corporation is a South African company that designs, develops and markets protective equipment and apparel for action sports and powersports participants. Its products are sold primarily under the Leatt brand and are intended for motocross, off-road motorcycling, mountain biking and related activities. The company's product portfolio includes neck braces, helmets, body armor, chest protectors, knee and elbow guards, gloves, riding jerseys and pants, boots, footwear, hydration systems and other protective or performance-oriented accessories.

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