Outdoor lifestyle and equipment company Clarus (NASDAQ:CLAR) reported Q1 CY2025 results topping the market’s revenue expectations, but sales fell by 12.8% year on year to $60.43 million. Its non-GAAP loss of $0.02 per share was $0.03 below analysts’ consensus estimates.
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Clarus (CLAR) Q1 CY2025 Highlights:
- Revenue: $60.43 million vs analyst estimates of $56.23 million (12.8% year-on-year decline, 7.5% beat)
- Adjusted EPS: -$0.02 vs analyst estimates of $0.01 ($0.03 miss)
- Adjusted EBITDA: -$761,000 vs analyst estimates of $589,400 (-1.3% margin, significant miss)
- Pulled its guidance due to tariff uncertainty
- Operating Margin: -11.2%, down from -9.8% in the same quarter last year
- Market Capitalization: $131 million
“Against an increasingly challenging consumer backdrop across the outdoor market, we continued to execute in line with our strategic roadmap in the first quarter, strengthening the core of our Outdoor segment and investing to scale our Adventure segment,” said Warren Kanders, Clarus’ Executive Chairman.
Company Overview
Initially a financial services business, Clarus (NASDAQ:CLAR) designs, manufactures, and distributes outdoor equipment and lifestyle products.
Sales Growth
A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Clarus grew its sales at a weak 2.9% compounded annual growth rate. This fell short of our benchmarks and is a poor baseline for our analysis.
Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Clarus’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 17.4% annually. 
This quarter, Clarus’s revenue fell by 12.8% year on year to $60.43 million but beat Wall Street’s estimates by 7.5%.
Looking ahead, sell-side analysts expect revenue to grow 4.2% over the next 12 months. While this projection indicates its newer products and services will fuel better top-line performance, it is still below average for the sector.
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Operating Margin
Clarus’s operating margin has shrunk over the last 12 months and averaged negative 17.7% over the last two years. Unprofitable consumer discretionary companies with falling margins deserve extra scrutiny because they’re spending loads of money to stay relevant, an unsustainable practice.
Clarus’s operating margin was negative 11.2% this quarter. The company's consistent lack of profits raise a flag.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Sadly for Clarus, its EPS declined by 16.6% annually over the last five years while its revenue grew by 2.9%. This tells us the company became less profitable on a per-share basis as it expanded.
In Q1, Clarus reported EPS at negative $0.02, in line with the same quarter last year. This print missed analysts’ estimates. We also like to analyze expected EPS growth based on Wall Street analysts’ consensus projections, but there is insufficient data.
Key Takeaways from Clarus’s Q1 Results
We enjoyed seeing Clarus beat analysts’ revenue expectations this quarter. On the other hand, its EPS and EBITDA missed, and it pulled its guidance due to tariff uncertainty. Overall, this was a weaker quarter. The stock remained flat at $3.50 immediately following the results.
Big picture, is Clarus a buy here and now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.