Dive Brief:
- In its first earnings report as a public company, Solo Brands on Wednesday reported net revenue increased more than 138% year over year to $69.4 million. (2021 results include the acquisition of Chubbies and Isle in the third quarter, which weren’t included in 2020’s third quarter results.)
- By segment, the company reported DTC revenues increased nearly 120% from last year to $58.1 million, while wholesale revenues increased 323.4% to $11.4 million, according to a company press release.
- Solo Brands’ net income fell 79.4% to $2.1 million from $10.3 million in the year-ago period, while operating income declined almost 60% to $4.3 million from $10.7 million last year.
Dive Insight:
A little over a month after its initial public offering, Solo Brands beat its own expectations in the third quarter.
The company — which said its Solo Stove brand continues to be its primary growth driver — also runs men’s apparel maker Chubbies and equipment brands Oru Kayak and Isle paddle boards after acquiring them last year.
Solo Brands’ IPO came amid a wave of public listings from DTC brands earlier this year. But unlike many of its peers entering the public markets, including Warby Parker and Allbirds, Solo Brands has managed to operate profitably.
While DTC still makes up the majority of its business, the company has inked wholesale partnerships with retailers like Ace Hardware, REI and Dick’s Sporting Goods.
“We recognize the importance of having a retail presence in order to meet customers where they are. We offer our products in selected retailers because we know that some customers prefer an in-person experience,” John Merris, CEO of Solo Brands, said on Wednesday’s call. Merris added that he sees an opportunity to expand further into wholesale and predicts that the channel has the potential to represent 15% to 20% of the business over the next five years.
The company also remains confident in its inventory levels despite industry-wide supply chain challenges. Solo Brands, in the third quarter, reported inventory was $113.6 million, up from $14.3 million last year, which the company is “confident is sufficient to meet demand.”
“Despite supply chain imbalances that are impacting many companies, we are well positioned with the level, mix and quantities of inventory on hand,” Sam Simmons, chief financial officer at Solo Brands, said on a conference call Wednesday. “We are in great shape to provide a best-in-class experience for our customers from order to delivery through the holidays and into next year.”
Solo Brands raised its full-year outlook, now expecting revenue to be between $344 million and $352 million, and adjusted EBITDA to be between $107 million and $109 million.
