American Outdoor Brands Inc (NASDAQ:AOUT) margin falls

American Outdoor Brands Inc (NASDAQ:AOUT) stock fell 0.71% (As on September 9, 11:30:17 AM UTC-4, Source: Google Finance) after the company surpasses analysts’ expectations for the first quarter of FY 23. E-commerce net sales of $20.5 million, which were driven by increased direct-to-consumer net sales, grew by 23.7%, while traditional net sales of $23.1 million, which were impacted by lower foot traffic at retail and lower shooting sports sales to OEM customers, declined by 47.6%. Compared with pre-COVID levels in the first quarter of fiscal 2020, total net sales grew 31.5%, while e-commerce net sales grew by 92.2% and traditional net sales grew by 2.7%. Quarterly gross margin was 43.6%, compared with quarterly gross margin of 47.7% for the comparable quarter last year, a decrease driven primarily by lower sales volumes and increased freight expenses. Quarterly non-GAAP net income was $84,000, compared with non-GAAP net income of $6.8 million. Quarterly Adjusted EBITDAS was $1.4 million, or 3.2% of net sales, compared with $9.6 million, or 15.7% of net sales, for the comparable quarter last year

AOUT in the first quarter of FY 23 has reported the adjusted earnings per share of 1 cents, beating the analysts’ estimates for the adjusted loss per share of 2 cents, according to the Zacks Consensus Estimate. The company had reported 28.1 percent fall in the adjusted revenue to $43.68 million in the first quarter of FY 23, beating the analysts’ estimates for revenue by 6.87%.

Moreover, the company estimate that these consolidations will yield a net cost savings of approximately $1.5 million per year, beginning in our fiscal fourth quarter. During the first quarter, the company amended the Columbia, Missouri facility lease agreement to add 35,000 square feet of space that provides the company the opportunity to increase the operational efficiency and leverage the Missouri facility. The company has then commenced plans to consolidate the Crimson Trace operations in Wilsonville, Oregon, as well as the Grilla operations in Holland, Michigan and Dallas, Texas, into the Missouri facility.

Additionally, Cash from operations exceeded $5.0 million, allowing the company to reduce the outstanding balance on the line of credit.  The cash balance of $17.5 million, combined with the capacity on the line of credit, provided the company with up to $72.0 million of available capital at the end of the first quarter, and a net debt leverage ratio of less than 0.1 times the trailing 12-month Adjusted EBITDAS.

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