Solo Brands’ sales slide 17.6% but margins widen and cash doubles (NYSE: SBDS)

Posted by Linda Flegge on Nov 13th, 2026

What happened

Solo Brands, Inc. (NYSE: SBDS) said third-quarter net sales fell 17.6% to $43.7 million while gross margin widened to 63.4%. A year earlier, gross margin was 60.0%.

The Grapevine, Texas company sells through its Solo Stove, Chubbies and Watersports segments. It reported the results on Nov. 12.

President and Chief Executive Officer John Larson called the third quarter the seasonally smallest sales quarter. He said revenue performance "remains below our expectations" but pointed to more than $6 million of operating cash flow in the quarter.

Adjusted EBITDA was a loss of $2.1 million, or 4.9% of net sales. A year earlier it was a loss of $5.1 million, or 9.6%. The net loss attributable to Solo Brands widened to $20.8 million from $15.0 million. The loss per share narrowed to $8.08 from $9.22.

Key numbers

Metric	Latest	Change	Source
Q3 net sales	$43.7 million	from $53.0 million, -17.6%	SEC 8-K, Q3 2026 earnings release
Q3 gross margin	63.4%	from 60.0%, +3.4 percentage points	Calculated from SEC 8-K
Q3 adjusted EBITDA	-$2.1 million	from -$5.1 million, +$3.0 million	Calculated from SEC 8-K
Nine-month operating cash flow	$26.0 million	from -$53.0 million, +$79.0 million	Calculated from SEC 8-K
Cash and equivalents (Sept. 30 vs Dec. 31, 2025)	$40.2 million	from $20.0 million, +$20.2 million	Calculated from SEC 8-K
2026 net sales guidance	$270 million to $290 million		SEC 8-K, Q3 2026 earnings release

Where the margin gain comes from

Gross profit fell to $27.7 million from $31.8 million, yet adjusted gross margin rose to 64.4% from 60.6%. The company says lower net sales and changes in channel mix weighed on gross profit. Reduced promotions and tariff impacts partly offset them.

Cost cuts did more of the work below that line. Selling, general and administrative expenses dropped 20.0% to $31.6 million from $39.5 million. The company credits lower payroll, reduced Solo Stove marketing and lower variable costs on lower direct-to-consumer sales.

Restructuring, contract termination and impairment charges rose to $6.0 million from $1.9 million. The company says they are mainly non-cash impairments and one-time costs from streamlining its fulfillment footprint and exiting underperforming operations. Adjusted EBITDA excludes such charges.

Solo Stove net sales fell 19.9% to $24.7 million on lower unit volumes in core fire pits, partly offset by new products. Segment adjusted EBITDA still rose to $2.3 million from $1.4 million. Products launched over the past year made up nearly half of Solo Stove website sales.

Chubbies sales slid 16.8% to $13.7 million, yet its segment adjusted EBITDA reached $0.2 million versus a loss of $1.2 million. Watersports sales fell 7.4% to $5.3 million. Its segment adjusted EBITDA was $0.5 million, flat with a year earlier.

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Cash and the balance sheet

Operating activities provided $26.0 million of cash in the nine months, against a $53.0 million outflow in the same period of 2025. Inventory reductions added $20.6 million and accounts receivable $17.0 million. Part of the swing came from releasing working capital.

Cash stood at $40.2 million on Sept. 30, up from $20.0 million on Dec. 31, 2025. Inventory fell to $59.2 million from $81.6 million over the same stretch.

Debt remains the weight. Borrowings under the 2025 Term Loan were $264.4 million, including interest paid in kind. The revolving credit facility was undrawn with $50.3 million available. Interest paid in kind was $11.9 million in the nine months, up from $7.1 million. Total equity shrank to $22.0 million from $51.4 million at year-end.

Why it matters

OptimistFi has argued that Solo Brands' equity works only if demand stabilizes, premium gross margins hold, and cash generation returns before the balance sheet decides the outcome. This report supports the margin and cash conditions but not the demand one.

Over nine months, net sales were $195.1 million, down 12.4% from $222.5 million. Adjusted EBITDA still improved to $13.0 million, or 6.6% of net sales, from $8.9 million, or 4.0%. Cost cuts are outrunning the sales decline for now.

The caveat is that a smaller business carries a large term loan. The company's list of forward-looking risks includes its ability to continue as a going concern and its limited liquidity. The nine-month net loss attributable to Solo Brands was $30.6 million.

What's next

Management holds a conference call on Nov. 12 at 9:00 a.m. ET, with a replay available until Nov. 19.

The company updated 2026 guidance to net sales of $270 million to $290 million and adjusted EBITDA of $21 million to $25 million. OptimistFi's arithmetic against the nine-month results implies fourth-quarter net sales of $74.9 million to $94.9 million and adjusted EBITDA of $8.0 million to $12.0 million.

Holiday 2026 sales will decide whether that range holds. Sales at the low end with margins intact would back the turnaround case. A sales miss would put weight back on the debt. The next quarterly report will show the result.