Clarus’ third quarter results drew a positive market response, as the company’s revenue growth exceeded Wall Street expectations while profitability metrics held steady. Management credited the performance to strong demand for outdoor products in North American wholesale, notable success with the revamped Black Diamond apparel line, and the onboarding of new adventure customers in Australia. Executive Chairman Warren Kanders highlighted that the company’s shift toward a more focused product mix, as well as reductions in discontinued merchandise and operational expenses, were central to the quarter’s incremental improvements.
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Clarus (CLAR) Q3 CY2025 Highlights:
- Revenue: $69.35 million vs analyst estimates of $66.51 million (3.3% year-on-year growth, 4.3% beat)
- Adjusted EPS: $0.05 vs analyst estimates of $0.06 (in line)
- Adjusted EBITDA: $2.80 million vs analyst estimates of $2.70 million (4% margin, relatively in line)
- Operating Margin: -4.4%, up from -8% in the same quarter last year
- Market Capitalization: $132.5 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Clarus’s Q3 Earnings Call
- William Dossett (BNP Paribas): asked about the offset to Black Diamond apparel’s growth, given Outdoor segment sales were flat. CFO Michael Yates explained that weakness in the direct-to-consumer business and the absence of PIEPS sales offset the apparel gains.
- William Dossett (BNP Paribas): inquired about retail partner order trends for the spring season and holiday outlook. President Neil Fiske responded that spring order books appear positive though cautious, with wholesale channel momentum, but the holiday environment remains uncertain and more promotional.
Catalysts in Upcoming Quarters
In future quarters, our analyst team will be focused on (1) the effectiveness of Clarus’ second phase of tariff mitigation and sourcing changes, (2) the momentum of the Black Diamond apparel line and additional product launches, and (3) the pace of margin improvement as FX contracts roll off and cost actions take hold. We will also monitor retailer inventory trends and consumer sentiment as indicators of channel health.
Clarus currently trades at $3.45, up from $3.26 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
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