Clarus (CLAR) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue grew 2.5% year-over-year to $61.9 million, with gross margin expanding by 240 basis points to 36.8%, reflecting disciplined execution and premium product positioning.

• Net loss narrowed to $3.3 million from $5.2 million in Q1 2025, while adjusted net income reached $0.7 million versus an adjusted net loss of $1.2 million.

• Strategic alternatives review initiated, including potential sale of all or part of the business, with Jefferies LLC retained as financial advisor; no set timetable.

• Focus on simplification, core business execution, and cost reduction, with restructuring charges rising to $853,000.

• Legal and regulatory expenses increased due to ongoing CPSC and DOJ matters.

Financial highlights

• Q1 2026 consolidated sales were $61.9 million, up from $60.4 million in Q1 2025; domestic sales were $24.9 million (up 0.3%), international sales $37.1 million (up 4.0%).

• Gross margin improved to 36.8% from 34.4% year-over-year; adjusted gross margin also rose to 36.8%.

• Adjusted EBITDA was a $1.1 million loss (margin -1.8%), an improvement from $(1.4) million year-over-year.

• Net loss for Q1 2026 was $(3.3) million, improved from $(5.2) million in Q1 2025; adjusted net income was $0.7 million, or $0.02 per diluted share.

• Free cash flow was a $5.7 million outflow; cash and equivalents at quarter-end were $29.8 million, with no debt.

Outlook and guidance

• Full-year 2026 sales guidance revised to $245–$255 million (down $10 million at midpoint, all from Adventure segment); adjusted EBITDA guidance lowered to $3–$5 million (from $9–$11 million), reflecting Adventure headwinds and legal costs.

• Q2 2026 sales expected at $51–$53 million, with adjusted EBITDA loss of ~$3 million.

• Full-year free cash flow now expected to be flat (prior: $3–$4 million); capex for 2026 projected at $6M–$7M.

• Management expects further restructuring costs in 2026 as cost reduction actions continue.

• Liquidity needs for the next 12 months are expected to be met with current cash and operating cash flows.