Solo Brands, the parent company of Solo Stove, mentioned in their earnings call two weeks ago that they had more consolidating coming in 2026. They made major transformational moves in 2025, but they weren’t enough to support their shrinking revenue.

They revealed more details about their cost optimization plans for 2026 in an investor presentation they gave yesterday. The plans include consolidating roles and a reduction in force.

I’d expect a pretty big decrease in payroll expense from the first three bullets in the slide above. The first one I interpret as rather than having a functional leader for each brand, they consolidate the roles into a centralized function. That’s very common with holding companies looking to maximize their revenue compared to overhead salary. It just runs the risk of the centralized function not being as knowledgeable of each individual business unit.

The second bullet is pretty obvious. They’ve done rounds of staff reductions while they’ve rebuilt their business and more will be on the way.

Moving to third parties for fulfillment and closing warehouses should also yield expense saving in payroll and overhead. Quite a few businesses go this route including Revelyst last fall.

Reducing reliance on external professional services is also beneficial, depending on what they use those services for today. This may be a practice they developed when they were larger that no longer makes sense. Consultants can be great for certain cases where the expertise is needed in a temporary capacity, but it comes at a cost of losing that proficiency internally.

In addition to payroll reductions, Solo Brands is also being mindful of how they drive revenue and contribution margin.

Evaluating opportunities based on contribution is a good idea for driving business decisions. That’s the practice of looking at expenses directly tied to revenue opportunities to identify what drives the most value. This will help them find where they should be selling and at what price points to prioritize the areas they should invest capital.

It’s worth noting that in their presentation they emphasized the importance of innovation with their cost reduction efforts. Innovation still works with consumers, and it’s what’s been effective for Solo Brands. A focus on cost cutting without driving innovation would be shortsighted.