American Outdoor Brands Third Quarter Fiscal 2026 Earnings Call - Reiterated Guidance While Wrestling Tariff Hits, Aiming-Solutions Weakness, and a UST Impairment

Operator: Good day, everyone, and welcome to American Outdoor Brands, Inc. third 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.

Liz Sharp, Vice President of Investor Relations, American Outdoor Brands, Inc.: 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 products, 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 reference 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, impairment of assets held for sale, 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.

With that, I will turn the call over to Brian.

Brian Murphy, President and Chief Executive Officer, American Outdoor Brands, Inc.: Thanks, Liz, and thanks everyone for joining us today. I believe our third quarter performance demonstrates the disciplined execution of our strategy. In a period marked by shifting tariff policies, uneven retailer ordering patterns, and consumer uncertainty, our team remained focused on the fundamentals, delivering strong retail sell-through, advancing our innovation pipeline, and actively managing our portfolio to ensure our resources are concentrated behind the brands and product categories where we can create the most value. Despite the ongoing uncertainty that continues to characterize fiscal 2026, we believe our underlying operating model remains fully intact. Importantly, our results give us the confidence to reiterate our net sales and adjusted EBITDA guidance for fiscal 2026. With that, let’s dig into the details. Net sales for the quarter were $56.6 million, down 3.3% on a year-over-year basis, but ahead of our expectations.

To refresh everyone, there are a couple of elements creating tough sales comps in our current environment. One is an ongoing inventory reset taking place at our largest e-com retailer, and the other is the extended softness in the aiming solutions category. We believe these are near-term challenges and that our underlying business is performing very well. In fact, for the third quarter, when we adjust out for these elements, our net sales would have grown in the high single digits, and our POS results would have grown in the mid-teens. Even without that adjustment, our POS results were still strong, with growth of 5% for the quarter. This marks the third consecutive quarter of favorable POS results, which were led by strength in the outdoor lifestyle category. Ultimately, what matters most is what happens when consumers encounter our products at retail.

The continued strength we’re seeing in POS reinforces that our innovation is resonating. The outdoor lifestyle category generated over 62% of net sales in the quarter and delivered year-over-year growth of 5.4%, driven by strength in our BOG and MEAT! Your Maker brands. The shooting sports category declined 15% in the quarter, largely due to softness in aiming solution products. Notably, our Caldwell brand delivered solid growth, reflecting strong retailer and consumer response to the innovative ClayCopter platform. That momentum was reinforced at SHOT Show in January, where engagement around our new ClayCopter and Claymore connected products was exceptionally strong. Increasingly, retail partners are seeking differentiated innovation to drive traffic and strengthen consumer engagement, allowing us to take share following our entry into the shotgun sports category. Turning to innovation.

Investments we’ve made in our new product pipeline continue to bear fruit, with new products representing over 26% of our net sales in the quarter. Looking ahead, as we enter peak fishing season, we’re preparing an initial rollout in April of ScoreTracker LIVE, a platform that integrates Major League Fishing ScoreTracker technology into our BUBBA app to deliver real-time tournament hosting and live scoring to anglers and organizers everywhere. ScoreTracker LIVE brings the intensity and excitement once reserved for professional MLF bass tournaments to events of any size, from neighborhood competitions and school teams to local clubs and regional circuits. It also supports the growing adoption of catch and release tournament formats that promote sustainable fisheries, aligning competitive excitement with responsible stewardship.

These new products from Caldwell and BUBBA demonstrate that we are executing on a strategy that pairs two things in a novel way in our markets, and that is by combining innovative hardware with integrated digital capabilities, especially in categories where connectivity enhances the consumer experience. By building connected product ecosystems around select growth brands, we’re deepening engagement, creating differentiated value for our retail partners, and supporting recurring revenue opportunities that increase customer lifetime value. The momentum we’re seeing with brands like Caldwell and BUBBA reflects the impact of directing our capital and innovation priorities toward areas where our capabilities can create meaningful differentiation and long-term value. They are just two examples within what we consider to be our highest growth brands, which include BOG, BUBBA, Caldwell, Grilla, and MEAT! Your Maker.

We invest in them accordingly, and that same discipline also guides how we evaluate the rest of our portfolio. We continually assess where our proven innovation engine can have the greatest impact and, just as importantly, where it cannot. During the quarter, we took two actions that reflect that disciplined approach to capital allocation and portfolio management. First, we made the decision to divest our camping and survival brand. UST was originally acquired by our former parent company in 2016 and was included in our brand portfolio when we spun off in 2020. Since then, the camping accessories category has become increasingly price-driven and more brand agnostic, with retailers de-emphasizing traditional camping products and dedicating that shelf space to other product categories.

While we evaluated opportunities to introduce differentiated innovation in the camping category, we ultimately concluded that the UST brand is unlikely to benefit from our innovation capabilities, and additional investment would be unlikely to generate returns consistent with our expectations. Therefore, we will continue fulfilling customer orders from existing inventory while we evaluate opportunities to transition the brand and its remaining inventory to an appropriate buyer. Second, and as I mentioned earlier, weak trends in aiming solutions stand out in contrast to the balance of our shooting sports category. While we believe this market will rebound at some point, we also believe there is a greater near-term opportunity to redeploy capital into higher growth categories. As we prepare to accelerate the sell-through of a portion of this inventory, we took a reserve in the quarter that Andy will detail later.

Together, these actions demonstrate our focus on investing in the brands and product categories where innovation and differentiation can drive stronger long-term growth while reinforcing our commitment to disciplined working capital management. Lastly, I want to touch briefly on tariffs, which continue to represent a dynamic and evolving element of the operating environment for many companies, including ours. As we’ve discussed in prior quarters, and as we all continue to experience, the policy landscape around tariffs can change quickly, requiring us to remain agile and thoughtful in how we proceed. Our teams have done a great job staying close to these developments, evaluating the potential impacts, and positioning the business so that we can respond appropriately as conditions evolve. It’s clear that the current environment requires us to remain disciplined and agile.

Accordingly, we remain focused on the priorities that continue to strengthen our business, investing in innovation, refining our brand portfolio, and allocating capital with discipline. With a strong set of brands and well-performing operating model, we believe we are well positioned to navigate the current environment while continuing to build enduring long-term value for our shareholders. With that, I’ll turn it over to Andy to walk through the financial results.

Andy Fulmer, Chief Financial Officer, American Outdoor Brands, Inc.: Thanks, Brian. As Brian mentioned, we’re pleased with our third quarter results, particularly given the ongoing macroeconomic and tariff-related dynamics impacting our business. Net sales for Q3 were $56.6 million, compared to $58.5 million in Q3 last year, a decrease of 3.3%. In our outdoor lifestyle category, which consists of products relating to hunting, fishing, meat processing, outdoor cooking, and rugged outdoor activities, net sales for Q3 increased 5.4% over last year to $35.3 million. Mainly driven by increases in our BOG and MEAT! Your Maker brands. In our shooting sports category, which includes solutions for target shooting, aiming, safe storage, cleaning and maintenance, and personal protection, net sales declined 15% compared to last year, driven mainly by a decrease in aiming solutions.

Turning to our distribution channels, our traditional channel net sales decreased by 2.1% in Q3, while our e-commerce net sales decreased 4.6% compared to last year. Consistent with previous quarters this year, our largest e-com retailer continued to reset its inventory, which we believe is in response to tariff pressures. Domestic net sales decreased 3.4%, while international net sales remained relatively flat to Q3 of last year. Gross margin was 41% for Q3, down 370 basis points from Q3 last year, driven by the impact of new tariffs, including IEEPA tariffs, and an inventory reserve of $1.2 million related to aiming solutions that Brian discussed.

While the reserve impacted gross margin a bit in the quarter, it demonstrates our commitment to rationalize slower moving inventory so we can reallocate capital toward higher return opportunities, such as share repurchases and M&A opportunities. We expect to monetize a meaningful portion of this inventory over time, helping to drive improved working capital and enhancing financial flexibility. Without the reserve, gross margin would have been 43.1%, slightly ahead of our original expectations. It’s important to note that on February twentieth, the U.S. Supreme Court issued a ruling striking down tariffs previously imposed under IEEPA. The third quarter was the first period in which we began to see the impact of IEEPA tariffs flow through cost of goods sold, with approximately $1.7 million recognized in the quarter.

As a reminder, tariffs are capitalized into inventory and then recognized in the cost of goods sold as that inventory turns. As Brian explained, during the third quarter, we made the decision to divest our UST brand. Following this decision, we reclassified the related assets to assets held for sale and then performed a valuation based on expected future cash flows. As a result, we recorded a non-cash impairment charge of $3.4 million, which is reflected in operating expense in Q3. The UST contribution to the business has been minimal, and we do not anticipate any impact to our fiscal 2026 outlook. GAAP operating expenses for the quarter were $27.1 million compared to $25.8 million last year.

The increase was driven by the non-cash impairment related to UST, partially offset by lower variable costs from reduced net sales, as well as lower intangible amortization. On a non-GAAP basis, operating expenses in Q3 were $21 million compared to $22.7 million in Q3 of last year. Non-GAAP operating expenses exclude the non-cash impairment, intangible amortization, stock compensation, and certain non-recurring expenses as they occur. GAAP EPS for Q3 was a loss of $0.32 compared to GAAP EPS of $0.01 last year. On a non-GAAP basis, EPS was $0.12 for the third quarter compared to $0.21 last year. Our Q3 figures are based on our fully diluted share count of approximately 12.5 million shares, a number that should remain consistent through year-end outside of any additional share buybacks that may occur.

Adjusted EBITDA for the quarter was $3.3 million compared to $4.7 million in the third quarter of last year, driven by the $1.2 million inventory reserve and the $1.7 million of IEEPA tariffs I referenced in my gross margin discussion. Turning now to the balance sheet and cash flow. We continue to maintain a strong balance sheet, ending the quarter with $10.4 million in cash and no debt after repurchasing $1.4 million of our common stock. As we’ve discussed before, our business is seasonal, with the highest quarterly net sales typically occurring in Q2 and Q3. This pattern generally results in operating cash outflows in the first half of the fiscal year, followed by inflows in the second half as receivables are collected and inventory levels decline.

This seasonal pattern played out as expected in Q3. Operating cash inflow was $9.9 million in Q3, reflecting decreases in accounts receivable and inventory. During the quarter, inventory levels declined by $13.8 million, which includes UST-related assets for held for sale. We ended the quarter with total inventory of $110.2 million, down from $124 million at the end of Q2. We expect our inventory at the end of the year to be approximately $110 million, which is lower than we originally planned. We will continue to explore opportunities to further lower that balance by monetizing slower-moving inventory.

Our balance sheet remains strong and debt-free. We ended the quarter with no balance on our $75 million line of credit, resulting in total available capital of over $100 million. We’re also pleased to share that we recently amended our debt agreement with TD Bank to extend the maturity date to March 2031. We believe this renewal provides us with favorable pricing and terms reflecting the strength of our financial position. Turning to capital expenditures. We spent $1.2 million in Q3 primarily related to product tooling and patent costs. For full fiscal 2026, we are lowering our expected CapEx range by $500,000 and now expect to spend between $3.5 million and $4 million consistent with our asset-light operating model.

During Q3, we continued returning capital to shareholders through our share buyback program, repurchasing approximately 181,000 shares at an average price of $7.87 per share. Now turning to our outlook. We’re in the final stretch of our fiscal year, and we’re encouraged by our performance to date. As such, we are maintaining our previously communicated full year guidance for net sales, gross margin, and adjusted EBITDA. Let’s begin with net sales. We continue to expect fiscal 2026 net sales in the range of approximately $191 million-$193 million. Recall that at the end of fiscal 2025, retailers accelerated approximately $10 million of orders originally planned for fiscal 2026 to get ahead of impending tariffs, creating a more challenging comparison for the current year.

Including that impact, fiscal 2026 net sales would decline approximately 13%-14% year-over-year. However, adjusting for that acceleration, the underlying decline in net sales for fiscal 2026 would be approximately 5%, which we would view as solid performance given the current environment. Turning to gross margin. We continue to expect full year gross margins in the range of 42%-43%. This implies lower gross margins in Q4, primarily due to increased amortization of tariff variances, including IEEPA tariffs, associated with inventory purchases made earlier in the year. Turning to operating expenses. We’ve remained disciplined in managing our costs and avoiding structural expense growth, an approach that helps us maintain a lower level of expense over the long term, allowing us to be agile and asset light when responding to changes in our environment.

We’ve reduced spending in areas such as travel, remote office footprints, and non-essential contracts. As a result, we expect total operating expenses to decline for full fiscal 2026. With regard to tariffs, our outlook reflects our current expectations based on what we know today and mitigation initiatives that we’ve taken, which include pricing actions as well as benefiting from the flexibility of our asset-light business model. Our outlook does not reflect any potential tariff refunds, which remain subject to further guidance from U.S. Customs and Border Protection. Lastly, based on all the factors I have discussed, we continue to expect adjusted EBITDA for fiscal 2026 to be in the range of 4%-4.5% of net sales. We remain committed to our long-term operating model, which targets EBITDA contribution of 25%-30% on net sales above $200 million.

We’ve demonstrated this level of performance in the past, and as our brands continue to introduce innovative and compelling products, we remain confident in our ability to drive sustained profitability over time. With that, operator, please open the call for questions from our analysts.

Operator: Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing any keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. The first question will come from Matt Koranda with Roth Capital Partners. Please go ahead.

Matt Koranda, Analyst, Roth Capital Partners: Hey, guys. Good afternoon. Maybe we’ll start out with the POS commentary, up 5% year-over-year. I think you mentioned in the press release. I guess we still have to lap the kinda wonky fourth quarter from last year where retailers pre-ordered a fair bit. Can you just remind us what was pulled forward in the fourth quarter last year so we have, like, a reasonable comparison to make for the implied fourth quarter sales run rate?

Andy Fulmer, Chief Financial Officer, American Outdoor Brands, Inc.: Matt, this is Andy. Retailers pulled in roughly $10 million, and that was pretty much the last two weeks of Q4, so from May back into the last couple weeks of April.

Matt Koranda, Analyst, Roth Capital Partners: Okay, got it. It seems like fourth quarter, once we get through this period, perhaps there’s a little bit more appetite from your retail customers to sort of load in a bit more. I mean, maybe just talk about their inventory levels and where they sit currently, given POS has remained positive, but it seems like they’ve been sort of flushing inventory for the better part of the last couple of quarters.

Brian Murphy, President and Chief Executive Officer, American Outdoor Brands, Inc.: Yeah. Hey, Matt, it’s Brian. I think what you’re seeing here, we alluded to it at the beginning part of the script, where there are kind of two things occurring right now, that we have aiming solution softness, and then we have this large e-commerce customer that is, I would say, not destocking. I’d consider it more under-ordering relative to demand. We do expect that both of those areas will normalize at some point. That said, excluding those two isolated items, the majority of our business, the far majority of our business is performing quite well. You know, we had mentioned high single digits in the quarter versus last year and being up mid-teens for POS. That convergence, right, between POS and replenishment certainly is more correlated for the majority of our business.

Really, where we’re seeing that disconnect is with those two items I just mentioned. Going forward, I would expect at some point there will be a normalization. We are seeing signs of that, but not quite ready to declare finality by any means. Certainly things are moving, I think, in the right direction. It’s just gonna be a matter of time for those to normalize.

Matt Koranda, Analyst, Roth Capital Partners: Okay, got it. Andy mentioned we’re performing better on inventory reductions and expect to be at $110 million by the end of the year. Is that coming from sort of promotional activity and monetizing slow-moving inventory through promotions, or we’re just finding new avenues of demand? Like, maybe just help us understand why the inventory reduction’s happening a little faster than expected.

Andy Fulmer, Chief Financial Officer, American Outdoor Brands, Inc.: It assumes just a regular amount of promotions, like nothing crazy. In fact, I think there’s opportunity to get a little bit to end a little bit better than the $110 if we can move some of the slower moving inventory that I talked about.

Brian Murphy, President and Chief Executive Officer, American Outdoor Brands, Inc.: I think it’s just to add on what Andy said, it’s really about efficiency. You know, we talked about capital allocations, and we’re constantly looking for areas where we can take advantage of, you know, look, is there a higher growth opportunity on one side of the business versus another? The aiming solution product is great. It’s great. You know, something could change tomorrow, and we would see demand spike for that type of product. We just look at ourselves and say, "Look, the opportunity cost is too high. Let’s move through this." I think that’s part of it, is the reduction, but it’s also just increased efficiency from that higher growth inventory that’s gonna be churning through, which would lead to a lower inventory number.

Matt Koranda, Analyst, Roth Capital Partners: Okay, guys. Appreciate it. I’ll leave it there.

Operator: The next question will come from Doug Lane with Water Tower Research. Please go ahead.

Doug Lane, Analyst, Water Tower Research: Yes, excuse me. Good evening, everybody. Just staying on inventories, if you get down to your level that you’re expecting to end the year at, you’re still up a little bit versus the prior year in a year where sales went down. What was the reason for the increase in inventories to begin with, and do you think you’ll have to be a little bit more promotional going into the first half of 2027?

Andy Fulmer, Chief Financial Officer, American Outdoor Brands, Inc.: Yeah, Doug, this is Andy. The main driver there is the increase in tariffs. The year-over-year, it’s effectively all IEEPA and the Section 232 tariffs that we have now.

Brian Murphy, President and Chief Executive Officer, American Outdoor Brands, Inc.: Yeah, the core inventories is reducing really quite well. Yeah, it’s the tariffs are obfuscating the overall.

Doug Lane, Analyst, Water Tower Research: Yeah.

Brian Murphy, President and Chief Executive Officer, American Outdoor Brands, Inc.: business. It’s still real inventory, right? It’s real inventory number.

Doug Lane, Analyst, Water Tower Research: No, that makes sense. I get that. There’s questions.

Brian Murphy, President and Chief Executive Officer, American Outdoor Brands, Inc.: Sorry, Andy, second part.

Doug Lane, Analyst, Water Tower Research: Yeah. I wanted to talk about tariffs because you talked about the third quarter being the first real impact as that capitalized tariffs start coming through the cost of goods sold. Fourth quarter gross margin’s down. Or should we? I know you’re not giving 2027 guidance yet, but should we just directionally see continued gross margin pressure in the first half of 2027 as this capitalized tariffs continue to go through the P&L?

Andy Fulmer, Chief Financial Officer, American Outdoor Brands, Inc.: Yeah, I think that’s a safe assumption. We can’t comment on what the margin percentage would be. When you think back to when IEEPA-- the IEEPA tariff started back in April, March and April last year, they were accelerated all the way up to 125% in April, kinda died down to roughly 30% for a while, and then November down to 20%. As we talked about, those are capitalized into inventory and then amortized in the future. Yeah, you’ll see some spikes with those fluctuations rolling into fiscal 2027.

Brian Murphy, President and Chief Executive Officer, American Outdoor Brands, Inc.: I wanna jump in too, just to give some historical context. When we were hit with the first round of 301 tariffs in the first time the administration implemented the 301 tariffs back in 2018 or so. What you saw is a very similar pattern, where it hits immediately, you amortize that over time. But the pricing actions that you take, coupled with the fact that we are such, you know, prolific generators of new products, our new product velocity is off the charts. But that’s our main way for us to, over time, really reclaim that margin. I think you’re seeing something very similar right now, which if you look back, it took us probably, I don’t know, Andy, 18 months?

Andy Fulmer, Chief Financial Officer, American Outdoor Brands, Inc.: Yeah.

Brian Murphy, President and Chief Executive Officer, American Outdoor Brands, Inc.: Something like that. To be able to kind of fully recover that margin pressure. I think right now it’s a snapshot. It’s a moment in time, but this is actually following a pretty similar path.

Doug Lane, Analyst, Water Tower Research: The IEEPA tariffs. How much of your tariff pressure is from IEEPA, and will that help that it’s at least going away? Have you begun any efforts to try to recover the tariffs you already paid?

Andy Fulmer, Chief Financial Officer, American Outdoor Brands, Inc.: Yeah. The IEEPA tariffs are kind of that difference in pressure that you talked about before. TBD on what happens going forward, though, you know, the 122 tariffs as of today are 10% until, I think, the end of July or so. Who knows what that will be replaced with. We’re obviously keeping a keen eye on it, you know, every day as the news comes out. As far as the refunds go, you know, we’re doing everything we can to preserve our rights, and we’ll kind of see how that process shakes out.

Doug Lane, Analyst, Water Tower Research: Okay. Fair enough. Just lastly, you know, the third quarter sales came in better than you expected, than the Street expected, and the full year sales numbers unchanged. Did the third quarter borrow from the fourth quarter, or are you just being conservative given the environment?

Brian Murphy, President and Chief Executive Officer, American Outdoor Brands, Inc.: Yeah, I can jump in. No, there was no shifting of orders. You know, everything came through. That’s what we try to do each quarter is not try to pull or push in any way. Really want to have sort of a normal, recurring, more comparable business. From where I sit, you know, in this chair today, I didn’t see anything that caught my eye, you know, that’s something that’s worth calling out.

Doug Lane, Analyst, Water Tower Research: Okay. Fair enough. Thank you.

Brian Murphy, President and Chief Executive Officer, American Outdoor Brands, Inc.: Yep. Thank you.

Operator: Again, if you have a question, please press star and then one. The next question will come from Mark Smith with Lake Street Capital Markets. Please go ahead.

Mark Smith, Analyst, Lake Street Capital Markets: Hi, guys. First just a clarification question. Just looking at the impairment, just wanna confirm all of the impairment was on UST or was there anything else that was impaired?

Andy Fulmer, Chief Financial Officer, American Outdoor Brands, Inc.: No, 100% of the impairment was UST.

Mark Smith, Analyst, Lake Street Capital Markets: Perfect. Then second, just, you know, you talked a lot about point of sale, talked about a little bit about kinda where the consumer is today. Curious if you can give us more thoughts on kind of, you know, what you’re hearing, what you’re seeing out there from consumer spending, and as we think about, you know, shooting sports, you know, NICS improved a little bit, you know, following the end of the quarter. Have you seen any uptick since then? You know, any thoughts that you have on your consumer would be great.

Brian Murphy, President and Chief Executive Officer, American Outdoor Brands, Inc.: Sure. Hey, Mark. I’ll touch on shooting sports first because I think there’s an interesting contrast that’s happening there. You have Aiming Solutions, which based on some of the data that I’ve seen from third parties, has been one of the worst performing product categories in the space. Whereas, the areas that we play in outside of that are doing pretty well. In others, especially like shotgun sports, Caldwell, we’re seeing some really nice share gains there. I mean, a good portion of that new product revenue is coming from products like the new ClayCopter platform. Overall, I think we’re seeing good trends there. Just the Aiming Solutions is the one to kinda keep an eye on, but should normalize.

Let’s see, anything else related to the customer, I’d say, you know, there still is that bifurcation that we had talked about before. I think it’ll be interesting to see going forward what happens with oil prices. You know, do they sustain? But any uncertainty with the consumer is gonna lead them to start changing their behavior, most likely. You know, if unemployment begins to go up, the consumer’s under pressure, we’ll see what happens with rates. All that just adds to uncertainty. But, you know, in real time, it looks like, you know, store foot traffic growth does seem to be improving versus our last call, with looking at different retailers, so that’s a positive. I don’t know.

I think going forward, the consumer is still, you know, kind of a touch and go. I think the more affluent consumers are continuing to spend. Then I think the lower income, middle income folks are the avid, I would say, sportsmen and women are certainly still spending, and the more casual one is not. I think they’re really pulling back. I think AOUT is really well situated, just given kinda where our brands play and the innovation piece, which is so important to these retailers to pull in consumers.

Mark Smith, Analyst, Lake Street Capital Markets: Perfect. I think last question for me, just the topic du jour of inventories and kinda the guidance for year-end. You know, it seems like a lot of the new product that you had, which you showed off at SHOT Show and at ICAST, you know, is a lot of that going to be kind of built up in that inventory number at the end of the fiscal year? Or will you be shipping and have some of that cleared out before the end of the year? Second, just a moving piece within that, you know, will the ust, I imagine that’s a small piece of inventory. You know, do you expect that to kind of be all gone or at least not in the books at year-end inventory?

Andy Fulmer, Chief Financial Officer, American Outdoor Brands, Inc.: Yeah. As far as the new products, it’s a great question because the timing of two of the key products that you saw at SHOT Show is right near year-end. We’re planning to ship those to our customers kind of late April, early May. Yes, we will have, you know, some of that new product coming in ’cause obviously we wanna make sure our fill rates are good there. Then on the UST question, it’s pretty minimal at this point, after the impairment that was recorded. TBD on what that looks like going forward.

Mark Smith, Analyst, Lake Street Capital Markets: Perfect. Thank you, guys.

Brian Murphy, President and Chief Executive Officer, American Outdoor Brands, Inc.: Thanks, Mark.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Brian Murphy for any closing remarks.

Brian Murphy, President and Chief Executive Officer, American Outdoor Brands, Inc.: Thank you, operator. Before we close, I wanna let everyone know that we’ll be participating in the Roth Conference in California on March 23rd, and the Lake Street Virtual Conference on March 31st, so we hope to see some of you there. I also wanna thank our employees whose tireless commitment to innovation allows us to remain focused on executing our long-term vision. Thank you to everyone who joined us today. We look forward to speaking with you again next quarter.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.