Dive Brief:
- Relying on a strong performance at its wholesale partners, DTC lifestyle company Solo Brands on Thursday reported first quarter net sales increased 7.3% year over year to $88.2 million.
- Solo Brands — the parent of Chubbies shorts, Isle paddle boards, Oru Kayak and Solo Stove — reported Q1 wholesale revenue increased 52.3% to $33.5 million, while DTC revenue decreased 9.1% year over year to $54.8 million, according to a company press release.
- Solo Brands recorded a positive net income for the quarter of $933,000, compared to a net loss of $3.2 million last year. The company posted an operating income of $3.2 million versus a loss of $3.2 million in the year-ago period.
Dive Insight:
In its recent earnings call Somer Webb, the company’s chief financial officer, attributed the decline in DTC revenue to “inconsistent traffic trends” and said that it reduced the level of promotions, which helped the brand increase its overall gross margins.
“We are extremely pleased with our first quarter results. We generated solid gross profit and healthy adjusted EBITDA margins, all while making strategic investments in our business,” John Merris, CEO of Solo Brands, said in a statement. “In an uncertain and volatile macro environment, we remain focused on innovating and delivering great products that create meaningful experiences for customers. We will maintain our disciplined approach to financial management, which positions us to generate healthy growth, positive free cash flow, and strong returns on capital for our shareholders.”
Solo Stove was created by two brothers in 2011. Under the leadership of Merris, who became CEO in 2018, Solo Stove went on a buying spree in 2021, acquiring Oru Kayak in May, Isle in August and Chubbies in September of that year and subsequently changed its name to Solo Brands. The company filed an IPO in October of the same year.
Merris told shareholders that Solo Brands expects to grow through the introduction of new products and monitored expansion of retail doors both domestically and overseas. He emphasized the brand’s growing relationships with its wholesale partners as a driver of that business. Solo Brands sells products in retailers including Ace Hardware, REI and Dick’s Sporting Goods.
“Continuous product development not only helps attract new customers, but it is also easily marketable to our existing customer database, which drives repeat purchases, increases lifetime value and lowers our overall customer acquisition cost,” Merris said.
