American Outdoor Brands, Inc.

Good day, everyone, and welcome to the American Outdoor Brands, Inc. Second Quarter Fiscal 2026 Financial Results Conference Call. This call is being recorded. At this time, I would like to turn the call over to Liz Sharp, Vice President of Investor Relations, for some information about today's call.

Thank you, and good afternoon. Our comments today may contain predictions, estimates, and other forward-looking statements. Our use of words like anticipate, project, estimate, expect, intend, should, could, indicate, suggest, believe, and other similar expressions is intended to identify those forward-looking statements. Forward-looking statements also include statements regarding our product development, focus, objectives, strategies, and vision, our strategic evolution, our market share and market demand for our product, market and inventory conditions related to our products and in our industry in general, and growth opportunities and trends. Our forward-looking statements represent our current judgment about the future, and they are subject to various risks and uncertainties. Risk factors and other considerations that could cause our actual results to be materially different are described in our securities filings. You can find those documents as well as a replay of this call on our website at AOB.com. Today's call contains time-sensitive information that is accurate only as of this time, and we assume no obligation to update any forward-looking statements. Our actual results could differ materially from our statements today. A few important items to note about our comments on today's call. First, we referenced certain non-GAAP financial measures, Our non-GAAP results exclude amortization of acquired intangible assets, stock compensation, emerging growth transition costs, non-recurring inventory reserve adjustments, technology implementation costs, other costs, and income tax adjustments. The reconciliation of GAAP financial measures to non-GAAP financial measures, whether they are discussed on today's call, can be found in our filings as well as today's earnings press release. which are posted on our website. Also, when we reference EPS, we are always referencing fully diluted EPS. Joining us on today's call is Brian Murphy, President and CEO, and Andy Fulmer, CFO. And with that, I will turn the call over to Brian.

Thanks, Liz, and thanks everyone for joining us today. Reflecting on the second quarter, I'm very proud of the way our teams continue to deliver in a dynamic environment, efficiently managing tariffs customer ordering dynamics, and cost reduction opportunities, all while remaining committed to innovation in executing our strategy. That commitment to innovation, paired with disciplined execution of our strategy to enter new outdoor product categories, is fueling the strength of our growth brands and the engagement we're seeing from consumers and retail partners. Together, These factors enabled us to deliver second-quarter results that surpassed our expectations, even amid a dynamic retail backdrop. Pull-through of our products at several of our largest retailers was notably strong during the second quarter, with total POS up 4% year-over-year. This marks the second consecutive quarter of favorable POS performance, an encouraging indication that our products remain in demand and are helping to drive engagement at retail. This result is especially meaningful in light of recent reports from Placer.ai indicating that foot traffic at most retailers trended down during the period. Before I turn to channel selling, I want to take a step back and talk about the evolution that is occurring in our traditional and e-com sales channels. In our traditional channel, a growing share of what has historically been classified as brick and mortar or in-store sales are now occurring through traditional retailers' online channels. Buy online, pick up in store, ship to home, and same-day delivery, reflecting an evolutionary shift in how consumers shop. Many of our largest brick-and-mortar partners have invested heavily in omnichannel capabilities, and we are benefiting from that investment. For some of our retailers, online sales now represent up to 20% of their total revenue. Although these transactions reflect digital buying behavior, They are captured in a growing portion of our traditional sales channel results. In short, consumers are still buying online, but the where is shifting. Turning to our e-com channel. This channel has been evolving over time as well. Within this channel is our direct-to-consumer business on our own branded websites, as well as our sales to customers who only have an online presence. such as one of the world's largest online retailers. Over the past three and a half years, as our D2C business has grown, and as our traditional retailers have expanded their online presence, our exposure to customers with an online-only presence has reduced. In fact, online-only customers represent just 20% to 25% of our total net sales today. So with that evolution in mind, let's turn to sell-in for the quarter. We benefited from higher demand in our traditional channel, which makes up roughly 65% of our overall business. Sales into the traditional channel were up 2.3%, aligned directionally with our POS results for the quarter, an indication that our brands are performing well across the broader omni-channel landscape. This compares to lower demand in our e-commerce channel, which makes up roughly 35% of our business, where sales declined by 15.9%. While the decline is due largely to lower sales to our largest online-only e-com partner, we believe a meaningful portion of the softness is being offset by digital sales flowing through traditional retailers' online platforms, as I discussed earlier. Our second quarter results also reflected the continued expansion of our product and brand offerings within our existing retail partner network, consistent with our long-term growth strategy. During the quarter, we made meaningful progress with a major mass market retailer that is now introducing our Caldwell and Bach brands into thousands of their stores for the first time. Given this retailer's significant scale and reach, this new placement, curated specifically for this retailer's audience, provides a substantial increase in visibility for both brands. It also represents a strong example of how our retail partners are increasingly turning to our innovative and popular products to strengthen their assortments and help drive consumer traffic. Turning to innovation. Our innovation engine was firing on all cylinders this quarter. New products drove over 31% of net sales, demonstrating the power and consistency of our pipeline. We also locked in several launches for SHOT Show in January, including major expansions to our successful Caldwell Claycopter and Claymore lines for shotgun enthusiasts. At SHOT, we'll unveil the Caldwell Claycopter Surface-to-Air Launcher, a complete reimagining of our handheld disc launcher into a compact, lightweight, wireless ground unit featuring a 50-disc hopper and seamless integration with our new Caldwell ClayZap. Multiple units can be tethered together for greater challenge and fun, laying the groundwork for future gamification, much like we did with our Bubba brand. The Caldwell Clays app also makes Caldwell the only brand to bring disc and clay shooting together for the first time. Users can pair surface-to-air units with our new wireless electronic clay thrower, the Claymore Connect. Coordinating disc and clay launches simultaneously for the most dynamic shotgun training and recreational shooting experience ever. With these new additions to the Caldwell platform, our team has done an incredible job demonstrating that we don't just participate in categories, we reshape them. And we're not the only ones who feel this way. The Caldwell Playcopter was just named as the 2025 Innovation of the Year by Guns and Ammo Magazine and by the Industry Choice Awards. Over the past five years, our innovation pipeline has generated nearly $100 million in incremental annual new product revenue. Today, I believe that innovation pipeline is the strongest in our company's history, and this is only the beginning. Couldn't be more excited about SHOT Show in January, where we'll introduce another wave of innovation that will fuel our brands into fiscal 2027 and beyond. Now, just a quick update on Black Friday. We're very encouraged by our results on Black Friday and Saturday, as well as our overall performance in November. Initial POS results are in and show that each of our leading brands performed well, not just over the holiday weekend, but throughout the month. In our outdoor lifestyle category, POS for November grew approximately 13%, an exceptional result that reflects the continued strength of our including bog, meat, and bubble, with both consumers and retailers. As we head into the back half of the year, we're optimistic but remain cautious about the macro environment, particularly surrounding evolving consumer spending patterns and the resulting volatility in retail order patterns that is often the result. Feedback from our retailers indicates that consumer health is somewhat fractured with higher income cohorts remaining healthy and lower income cohorts facing increasing pressure. We've all read this in recent media reports, and we see it reflected in our own sales analysis as well, with higher ASP products outperforming the pack. Accordingly, and not surprisingly, we continue to see demand patterns from our retailers that are highly variable, as they seek to address their divergent consumer audience, try to assess the impact of their pricing decisions on demand elasticity, and then work to manage their inventory levels relative to those two factors. These dynamics underscore the importance of having a business model designed for agility and strength. Because we've deliberately built our company on a core foundation of innovation, our brands continue to deliver compelling new products, build consumer loyalty, expand our market presence, and strengthen our relationships with our retail partners. With innovation at the center of our strategy and a proven ability to stay focused on our priorities, we're confident that our agility will enable us to navigate what lies ahead and deliver durable, long-term value for our shareholders. And with that, I'll turn it over to Andy to walk through the financial results.