American Outdoor Brands, Inc.
For the period ended Jan 31, 2026. Filed Mar 12, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jan 31, 2026 · Filed Mar 12, 2026
AOUT$17.31+0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-10-31; filed 2025-12-09.
0001808997-25-000065
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-01-31; filed 2026-03-12.
0001808997-26-000011
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 78 previous paragraphs and 83 current paragraphs.
34 unchanged; 40 reworded; 8 added; 3 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 18 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
In 2025, the U.S. Administration imposed a series of tariffs on nearly all U.S. trading partners pursuant to the International Emergency Economic Powers Act of 1977 (“IEEPA”). On February 20, 2026, the United States Supreme Court issued a ruling striking down tariffs previously imposed under IEEPA. The ultimate availability, timing, and amount of any potential refunds of such tariffs remain highly uncertain and could be subject to further legal, regulatory, and administrative developments. Following the Supreme Court’s decision, the U.S. Administration announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from nearly all countries, in addition to any existing non-IEEPA tariffs. There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on our business. We continue to monitor and evaluate these developments and assess their potential impact on our business, financial condition, and results of operations.
Current report
On December 12, 2025, our Board of Directors approved a plan to divest our ust branded product line (the “Disposal Group”). The Disposal Group consists primarily of inventory and long-lived intangible assets associated with the brand. We expect to complete the divestiture within twelve months. The Disposal Group does not represent a strategic shift that will have a major effect on our operations or financial results.
Current report
We concluded that the Disposal Group met the criteria for classification as held for sale under ASC 360-10 –Property, Plant, and Equipment during the three months ended January 31, 2026 and does not qualify as discontinued operations under ASC 205-20 –Presentation of Financial Statements. The results of the Disposal Group will continue to be reported within continuing operations.
Current report
Third Quarter Fiscal 2026 Highlights
Current report
•Gross margin was 41.0%, a decrease of 370 basis points, from the comparable quarter last year.
Current report
•Gross margin was 44.0%, a decrease of 210 basis points, from the prior year comparable period.
Current report
(a) On February 20, 2026, the United States Supreme Court issued a ruling striking down tariffs previously imposed under IEEPA, as mentioned above. Our non-GAAP Adjusted EBITDA for both the three and nine months ended January 31, 2026, included $1.7 million of costs related to these IEEPA tariffs as we began to expense those costs in our third quarter of fiscal 2026.
Current report
During the three months ended January 31, 2026, we recorded a $3.5 million non-cash impairment charge related to the write-down of the Disposal Group assets to estimated fair value less costs to sell. The impairment charge was non-cash and did not impact our liquidity, cash flows from operations, or compliance with debt covenants. We expect the transaction to close within the next twelve months; however, the timing and ultimate proceeds remain subject to market conditions and buyer negotiations. Proceeds from the sale, if completed, are expected to be used for general corporate purposes.
Removed paragraphs (3)
Previous report
Second Quarter Fiscal 2026 Highlights
Previous report
•Gross margin was 45.6%, a decrease of 240 basis points, from the comparable quarter last year.
Previous report
•Gross margin was 46.0%, a decrease of 100 basis points, from the prior year comparable period.
Reworded paragraphs (40)
Previous wording
The following discussion and analysis of our financial condition and results of operations for the three and six months ended October 31, 2025 and 2024 should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for fiscal year ended April 30, 2025. This discussion and analysis should also be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included in Item 1 of this Quarterly Report on Form 10-Q.
Current wording
The following discussion and analysis of our financial condition and results of operations for the three and nine months ended January 31, 2026 and 2025 should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for fiscal year ended April 30, 2025. This discussion and analysis should also be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included in Item 1 of this Quarterly Report on Form 10-Q.
Previous wording
•Net sales were $57.2 million, a decrease of $3.0 million or 5.0%, from the comparable quarter last year.
Current wording
•Net sales were $56.6 million, a decrease of $1.9 million or 3.3%, from the comparable quarter last year.
Previous wording
•Net income was $2.1 million, or $0.16 per diluted share, compared with net income of $3.1 million, or $0.24 per diluted share, for the comparable quarter last year.
Current wording
•Net loss was $4.1 million, or ($0.33) per diluted share, compared with net income of $169,000, or $0.01 per diluted share, for the comparable quarter last year.
Previous wording
•Non-GAAP Adjusted EBITDA was $6.5 million for the three months ended October 31, 2025 compared with $7.5 million for the three months ended October 31, 2024. See non-GAAP financial measure disclosures below for our reconciliation of non-GAAP Adjusted EBITDA.
Current wording
•Non-GAAP Adjusted EBITDA was $3.3 million for the three months ended January 31, 2026 compared with $4.7 million for the three months ended January 31, 2025. See non-GAAP financial measure disclosures below for our reconciliation of non-GAAP Adjusted EBITDA.
Previous wording
Our operating results for the six months ended October 31, 2025 included the following:
Current wording
Our operating results for the nine months ended January 31, 2026 included the following:
Previous wording
•Net sales were $86.9 million, a decrease of $15.0 million or 14.7%, from the prior year comparable period.
Current wording
•Net sales were $143 million, a decrease of $16.9 million or 10.5%, from the prior year comparable period.
Previous wording
•Net loss was $4.8 million, or $(0.37) per diluted share, compared with net income of $746,000, or $0.06 per diluted share, for the prior year comparable period.
Current wording
•Net loss was $8.9 million, or $(0.70) per diluted share, compared with net income of $915,000, or $0.07 per diluted share, for the prior year comparable period.
Previous wording
•Non-GAAP Adjusted EBITDA was $3.4 million for the six months ended October 31, 2025 compared with $9.5 million for the six months ended October 31, 2024. See non-GAAP financial measure disclosures below for our reconciliation of non-GAAP Adjusted EBITDA.
Current wording
•Non-GAAP Adjusted EBITDA was $6.7 million for the nine months ended January 31, 2026 compared with $14.2 million for the nine months ended January 31, 2025. See non-GAAP financial measure disclosures below for our reconciliation of non-GAAP Adjusted EBITDA.
Previous wording
For the three months ended October 31, 2025, total net sales decreased $3.0 million, or 5.0%, from the comparable quarter last year with lower net sales in both our shooting sports and outdoor lifestyle categories, primarily from lower e-commerce channel net sales. The decrease in net sales was partially offset by price increases on our products to mitigate additional tariff costs associated with tariffs imposed by the U.S. Administration in March and April of 2025.
Current wording
For the three months ended January 31, 2026, total net sales decreased $1.9 million, or 3.3%, from the comparable quarter last year primarily from lower aiming solutions product net sales in our shooting sports category, partially offset by increased hunting and meat processing net sales in our outdoor lifestyle category. The decrease in total net sales was partially offset by pricing actions taken on our products to mitigate additional tariff costs associated with tariffs imposed by the U.S. Administration starting in March and April of 2025.
Previous wording
Net sales in our e-commerce channel decreased $3.9 million, or 15.9%, from the comparable quarter last year, primarily because of lower net sales to the world's largest online retailer. We believe this decline reflects their inventory management actions, which reduced net sales across most of our products. In addition, we had lower direct-to-consumer net sales for products sold on our websites due to reduced consumer demand.
Current wording
Net sales in our e-commerce channel decreased $1.3 million, or 4.6%, from the comparable quarter last year, primarily because of lower net sales to the world's largest online retailer. We believe this decline reflects their inventory management actions, which reduced net sales across most of our products.
Previous wording
Net sales in our traditional channel increased by $828,000, or 2.3%, compared to the same quarter last year, driven primarily by stronger hunting and outdoor cooking product sales within our outdoor lifestyle category. This growth was partially offset by lower sales of our meat processing equipment.
Current wording
Net sales in our traditional channel decreased by $671,000, or 2.1%, compared to the same quarter last year, driven primarily by lower aiming solutions net sales in our shooting sports category, partially offset by increased hunting, fishing, and meat processing product net sales within our outdoor lifestyle category.
Previous wording
New products, which we define as any SKU introduced over the prior two fiscal years, represented 31.4% of net sales for the three months ended October 31, 2025.
Current wording
New products, which we define as any SKU introduced over the past 24 months, represented 26.6% of net sales for the three months ended January 31, 2026.
Previous wording
Gross margin for the three months ended October 31, 2025 decreased 240 basis points over the comparable quarter last year, primarily because of higher promotional activity, including sales of slow-moving inventory at low margins; increased depreciation expense; and higher inbound freight and tariff costs.
Current wording
Gross margin for the three months ended January 31, 2026 decreased 370 basis points from the comparable quarter last year, primarily because of recording additional reserves on slow-moving inventory, to record at net realizable value and to reallocate capital towards higher-return opportunities; increased depreciation expense; and higher inbound freight and tariff costs.
Previous wording
The following table sets forth certain information regarding consolidated net sales and gross profit for the six months ended October 31, 2025 and 2024 (dollars in thousands):
Current wording
The following table sets forth certain information regarding consolidated net sales and gross profit for the nine months ended January 31, 2026 and 2025 (dollars in thousands):
Previous wording
The following table sets forth certain information regarding trade channel net sales for the six months ended October 31, 2025 and 2024 (dollars in thousands):
Current wording
The following table sets forth certain information regarding trade channel net sales for the nine months ended January 31, 2026 and 2025 (dollars in thousands):
Previous wording
The following table sets forth certain information regarding geographic makeup of net sales included in the above table for the six months ended October 31, 2025 and 2024 (dollars in thousands):
Current wording
The following table sets forth certain information regarding geographic makeup of net sales included in the above table for the nine months ended January 31, 2026 and 2025 (dollars in thousands):
Previous wording
The following table sets forth certain information regarding net sales categories for the six months ended October 31, 2025 and 2024 (dollars in thousands):
Current wording
The following table sets forth certain information regarding net sales categories for the nine months ended January 31, 2026 and 2025 (dollars in thousands):
Previous wording
For the six months ended October 31, 2025, total net sales decreased $15.0 million, or 14.7%, from the prior year comparable period. We believe the decrease in net sales was primarily a result of certain customers in our traditional channel accelerating into our fourth fiscal quarter of 2025 orders that we had originally planned to receive in our first fiscal quarter of 2026, which we believe was due to the anticipated increased costs associated with tariffs imposed by the U.S. Administration in March and April of 2025. The decrease in net sales was partially offset by price increases on our products to mitigate the additional tariff costs.
Current wording
For the nine months ended January 31, 2026, total net sales decreased $16.9 million, or 10.5%, from the prior year comparable period. We believe the decrease in net sales was primarily a result of certain customers in our traditional channel accelerating into our fourth fiscal quarter of 2025 orders that we had originally planned to receive in our first fiscal quarter of 2026, which we believe was due to the anticipated increased costs associated with tariffs imposed by the U.S. Administration starting in March and April of 2025. The decrease in net sales was partially offset by pricing actions taken on our products to mitigate the additional tariff costs.
Previous wording
Net sales in our e-commerce channel decreased $9.7 million, or 23.7%, from the prior year comparable period, primarily because of lower net sales to the world's largest online retailer that resulted in lower net sales for the majority of our product categories.
Current wording
Net sales in our e-commerce channel decreased $10.9 million, or 16.1%, from the prior year comparable period, primarily because of lower net sales to the world's largest online retailer that resulted in lower net sales for the majority of our product categories.
Previous wording
Net sales in our traditional channel decreased $5.3 million, or 8.7%, from the prior year comparable period, which we believe is from acceleration of orders into our fourth fiscal quarter of 2025, as mentioned above. Traditional channel net sales decreased primarily because of lower net sales of the majority of our product categories, partially offset by higher personal protection product sales in our shooting sports category and outdoor cooking product sales in our outdoor lifestyle category.
Current wording
Net sales in our traditional channel decreased $6.0 million, or 6.5%, from the prior year comparable period, which we believe is from acceleration of orders into our fourth fiscal quarter of 2025, as mentioned above. Traditional channel net sales decreased primarily because of lower net sales of the majority of our product categories, partially offset by higher hunting and outdoor cooking product sales in our outdoor lifestyle category.
Previous wording
New products, which we define as any SKU introduced over the prior two fiscal years, represented 30.5% of net sales for the six months ended October 31, 2025.
Current wording
New products, which we define as any SKU introduced over the the past 24 months, represented 29.0% of net sales for the nine months ended January 31, 2026.
Previous wording
Research and development expenses decreased $644,000 from the comparable quarter last year, primarily from lower depreciation expense. Selling, marketing, and distribution expenses decreased $642,000 from the comparable quarter last year mainly because of lower sales-volume related expenses, including compensation-related expenses. General and administrative expenses decreased $545,000 from the comparable quarter last year, primarily because of lower variable compensation-related expenses and acquired intangible amortization expense, partially offset by higher public company costs.
Current wording
Total operating expenses of $27.1 million included a $3.4 million non-cash impairment charge during the three months ended January 31, 2026 related to the write-down of the Disposal Group assets to estimated fair value less costs to sell. Total operating expenses, excluding this non-cash impairment charge, were $23.7 million, or $2.2 million lower than the comparable quarter last year. Research and development expenses decreased $615,000 from the comparable quarter last year, primarily from lower depreciation expense. Selling, marketing, and distribution expenses decreased $650,000 from the comparable quarter last year mainly because of lower sales-volume related expenses, including compensation-related expenses. General and administrative expenses decreased $895,000 from the comparable quarter last year, primarily because of lower variable compensation-related expenses and acquired intangible amortization expense, partially offset by higher public company costs.
Previous wording
The following table sets forth certain information regarding operating expenses for the six months ended October 31, 2025 and 2024 (dollars in thousands):
Current wording
The following table sets forth certain information regarding operating expenses for the nine months ended January 31, 2026 and 2025 (dollars in thousands):
Previous wording
Research and development expenses decreased $363,000 from the prior year comparable period, primarily from lower depreciation expense. Selling, marketing, and distribution expenses decreased $1.5 million from the prior year comparable period mainly because of lower sales-volume related expenses, including compensation-related expenses. General and administrative expenses decreased $784,000 from the prior year comparable period, primarily because of lower variable compensation-related expenses and acquired intangible amortization expense, partially offset by higher public company costs.
Current wording
Total operating expenses of $71.8 million included a $3.4 million non-cash impairment charge during the nine months ended January 31, 2026 related to the write-down of the ust brand Disposal Group assets to estimated fair value less costs to sell. Total operating expenses, excluding this non-cash impairment charge, were $68.3 million, or $4.8 million lower than the prior year comparable period. Research and development expenses decreased $978,000 from the prior year comparable period, primarily from lower depreciation expense. Selling, marketing, and distribution expenses decreased $2.2 million from the prior year comparable period mainly because of lower sales-volume related expenses, including compensation-related expenses. General and administrative expenses decreased $1.7 million from the prior year comparable period, primarily because of lower variable compensation-related expenses and acquired intangible amortization expense, partially offset by higher public company costs.
Previous wording
Operating income for the three months ended October 31, 2025 was $979,000 lower as compared to the comparable quarter last year primarily from lower net sales volume that resulted in $2.8 million of lower gross profit, partially offset by $1.8 million of lower operating expenses.
Current wording
Operating loss for the three months ended January 31, 2026 was $3.9 million as compared to operating income of $303,000 for the comparable quarter last year. The operating loss for the three months ended January 31, 2026 was primarily from lower net sales volume that resulted in $2.9 million of lower gross profit and a $3.4 million one-time non-cash impairment charge on assets held for sale.
Previous wording
The following table sets forth certain information regarding operating (loss)/income for the six months ended October 31, 2025 and 2024 (dollars in thousands):
Current wording
The following table sets forth certain information regarding operating (loss)/income for the nine months ended January 31, 2026 and 2025 (dollars in thousands):
Previous wording
We recorded an operating loss of $4.7 million for the six months ended October 31, 2025 as compared to operating income of $497,000 in the prior year comparable period. The decrease in operating income is primarily because of lower net sales volume that resulted in $7.9 million of lower gross profit, partially offset by $2.7 million of lower operating expenses.
Current wording
We recorded an operating loss of $8.6 million for the nine months ended January 31, 2026 as compared to operating income of $799,000 in the prior year comparable period. The operating loss during the nine months ended January 31, 2026 is primarily because of lower net sales volume that resulted in $10.8 million of lower gross profit and a $3.4 million one-time non-cash impairment charge on assets held for sale, partially offset by $1.4 million of lower operating expenses.
Previous wording
We recorded no income tax expense for the three months ended October 31, 2025 compared with income tax expense of $12,000 for the comparable quarter last year. The income tax expense recorded for the three months ended October 31, 2025 and 2024 was primarily due to a full valuation allowance recorded against our deferred tax assets.
Current wording
We recorded income tax expense of $1,000 for the three months ended January 31, 2026 compared with income tax expense of $58,000 for the comparable quarter last year. The income tax expense recorded for the three months ended January 31, 2026 and 2025 was primarily due to a full valuation allowance recorded against our deferred tax assets.
Previous wording
The following table sets forth certain information regarding income tax benefit for the six months ended October 31, 2025 and 2024 (dollars in thousands):
Current wording
The following table sets forth certain information regarding income tax benefit for the nine months ended January 31, 2026 and 2025 (dollars in thousands):
Previous wording
We recorded income tax expense of $53,000 for the six months ended October 31, 2025 compared with income tax expense of $34,000 for the prior year comparable period. The income tax expense recorded for the six months ended October 31, 2025 and 2024 was primarily due to a full valuation allowance recorded against our deferred tax assets.
Current wording
We recorded income tax expense of $54,000 for the nine months ended January 31, 2026 compared with income tax expense of $92,000 for the prior year comparable period. The income tax expense recorded for the nine months ended January 31, 2026 and 2025 was primarily due to a full valuation allowance recorded against our deferred tax assets.
Previous wording
The following table sets forth certain information regarding net income and the related per share data for the three months ended October 31, 2025 and 2024 (dollars in thousands, except per share data):
Current wording
The following table sets forth certain information regarding net (loss)/income and the related per share data for the three months ended January 31, 2026 and 2025 (dollars in thousands, except per share data):
Previous wording
Net income was $2.1 million, or $0.16 per diluted share, for the three months ended October 31, 2025 compared with net income of $3.1 million, or $0.24 per diluted share, for the comparable quarter last year. The lower net income was primarily related to lower net sales volume and lower gross profit during the three months ended October 31, 2025 as compared to the three months ended October 31, 2024.
Current wording
Net loss was $4.1 million, or $0.32 per diluted share, for the three months ended January 31, 2026 compared with net income of $169,000, or $0.01 per diluted share, for the comparable quarter last year. The lower net income was primarily related to lower net sales volume and lower gross profit as well as a $3.4 million one-time non-cash impairment charge on assets held for sale during the three months ended January 31, 2026 as compared to the three months ended January 31, 2025.
Previous wording
The following table sets forth certain information regarding net (loss)/income and the related per share data for the six months ended October 31, 2025 and 2024 (dollars in thousands, except per share data):
Current wording
The following table sets forth certain information regarding net (loss)/income and the related per share data for the nine months ended January 31, 2026 and 2025 (dollars in thousands, except per share data):
Previous wording
Net loss was $4.8 million, or $0.37 loss per diluted share, for the six months ended October 31, 2025 compared with net income of $746,000, or $0.06 per diluted share, for the prior year comparable period. The net loss was primarily related to lower net sales volume and lower gross profit during the six months ended October 31, 2025 as compared to the six months ended October 31, 2024.
Current wording
Net loss was $8.8 million, or $0.70 loss per diluted share, for the nine months ended January 31, 2026 compared with net income of $915,000, or $0.07 per diluted share, for the prior year comparable period. The net loss was primarily related to lower net sales volume and lower gross profit as well as a $3.4 million one-time non-cash impairment charge on assets held for sale during the nine months ended January 31, 2026 as compared to the nine months ended January 31, 2025.
Previous wording
The following table sets forth our calculation of non-GAAP Adjusted EBITDA for the three and six months ended October 31, 2025 and 2024, respectively (dollars in thousands):
Current wording
The following table sets forth our calculation of non-GAAP Adjusted EBITDA for the three and nine months ended January 31, 2026 and 2025, respectively (dollars in thousands):
Previous wording
The following table sets forth certain cash flow information for the six months ended October 31, 2025 and 2024 (dollars in thousands):
Current wording
The following table sets forth certain cash flow information for the nine months ended January 31, 2026 and 2025 (dollars in thousands):
Previous wording
Cash used in operating activities was $15.0 million for the six months ended October 31, 2025 compared with cash used in operating activities of $12.3 million for the six months ended October 31, 2024. Cash used by operating activities for the six months ended October 31, 2025 was primarily impacted by $4.1 million of lower accrued payroll and incentives because of timing of payroll accruals and the annual payment of management incentives and $19.3 million of increased inventory. The increase in inventory was a result of planned increase in purchases to prepare for the fall and winter hunting and holiday seasons as well as new product launches later in the fiscal year. In addition, we capitalized higher tariff costs into inventory for tariffs imposed on inventory purchases for product manufactured in China. The cash usage for the six months ended October 31, 2025 was partially offset by a $3.4 million increase in accounts payable due to the timing of inventory purchases as we built our inventory balances higher during our first fiscal quarter, and $2.4 million of increase accrued expenses primarily related to the higher tariff expense imposed on inventory purchases for product manufactured in China.
Current wording
Cash used in operating activities was $5.1 million for the nine months ended January 31, 2026 compared with cash used in operating activities of $6.4 million for the nine months ended January 31, 2025. Cash used by operating activities for the nine months ended January 31, 2026 was primarily impacted by $5.3 million of lower accrued payroll and incentives because of timing of payroll accruals and the annual payment of management incentives, $2.6 million of increased accounts payable because of timing of inventory shipments, and $9.0 million of increased inventory. The increase in inventory was a result of planned increase in purchases to prepare new product launches later in the fiscal year. In addition, we capitalized higher tariff costs into inventory for tariffs imposed on inventory purchases for product manufactured in Asia. The cash usage for the nine months ended January 31, 2026 was partially offset by a $6.7 million of lower accounts receivable because of the timing of customer payments and product shipments.
Previous wording
Cash used in investing activities was $1.4 million during the six months ended October 31, 2025, a decrease of $217,000 as compared to the prior year comparable period. We expect to spend approximately $4.0 million to $4.5 million of capital expenditures in fiscal 2026, compared to the $3.9 million we spent in fiscal 2025.
Current wording
Cash used in investing activities was $2.6 million during the nine months ended January 31, 2026, a decrease of $838,000 as compared to the prior year comparable period. We expect to spend approximately $3.5 million to $4.0 million of capital expenditures in fiscal 2026, compared to the $3.9 million we spent in fiscal 2025.
Previous wording
Cash used in financing activities was $4.0 million for the six months ended October 31, 2025, primarily from $3.2 million used to repurchase 314,376 shares of our common stock.
Current wording
Cash used in financing activities was $5.4 million for the nine months ended January 31, 2026, primarily from $4.6 million used to repurchase 495,408 shares of our common stock.
Previous wording
We had $3.1 million of cash equivalents on hand as of October 31, 2025 and had $23.4 million in cash and cash equivalents on hand as of April 30, 2025.
Current wording
We had $10.4 million of cash equivalents on hand as of January 31, 2026 and had $23.4 million in cash and cash equivalents on hand as of April 30, 2025.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Gross margin for the nine months ended January 31, 2026 decreased 210 basis points from the prior year comparable period, primarily because of higher promotional activity, including sales of slow-moving inventory at low margins; recording additional reserves on slow-moving inventory, to record at net realizable value and to reallocate capital towards higher-return opportunities; increased depreciation expense; and higher inbound freight and tariff costs.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Gross margin for the six months ended October 31, 2025 decreased 100 basis points from the prior year comparable period, primarily because of higher promotional activity as well as higher depreciation, freight, and tariff costs.