Q2 2024 Solo Brands Inc Earnings Call Transcript
Key Points
- Total revenues increased modestly year-over-year, with a notable 4.8% growth in wholesale revenues.
- Generated healthy low double-digit EBITDA margins despite planned investments in people, processes, and capabilities.
- Strong brand loyalty and high Net Promoter Scores, particularly for Solo Stove, which is in the top 1 percentile in the outdoor goods market.
- Significant opportunities identified for market share growth and expansion into additional categories.
- Investments in new talent and infrastructure, including a new Senior Vice President of Direct-to-Consumer E-commerce and a new Senior Vice President of Product Development, to drive long-term growth.
- Direct-to-consumer revenues declined by 0.9%, with softer-than-expected traffic through the direct channel.
- Gross margin decreased by 60 basis points to 62.8%, primarily due to inventory fair value impact from 2023 acquisitions.
- Increased SG&A expenses, rising to 53.8% of sales from 48.5% a year ago, due to higher distribution, marketing, and IT costs.
- Second quarter net loss of $4 million, despite adjusted net income of $6.1 million and adjusted EBITDA of $15.5 million.
- Updated guidance reflects a cautious outlook due to challenging macroeconomic conditions and softer quarter-to-date trends.
Hello everyone and welcome to today's Solo Brands, Inc., second-quarter fiscal 2024 financial results call. My name is Seth, and I'll be the operator for your call today. (Operator Instructions)
I will now hand the floor to Bruce Williams to begin the call. Please go ahead.
Good morning everyone and thank you for joining the call to discuss Solo Brands' second quarter results, which we released this morning and can be found on the Investor Relations' section of our website at investors.solabrands.com. Today's call will be hosted by Chief Executive Officer, Chris Metz; and Chief Financial Officer, Laura Coffey.
Before we get started, I want to remind everyone that management's remarks on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on our current management expectations.
These may include, without limitation, predictions, expectations, targets, or estimates, including regarding our
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