Solo Stove parent company, Solo Brands, reported their Q4 and year ended 2022 financial results this morning. It was a strong end to the year for them, and as their stock price showed, it was positively received. It was also a year where they released more products than any other year in their history, with releases like the Tower, Surround, Mesa, etc.
Huge Wholesale Growth
Solo Brands has been a direct-to-consumer (DTC) first brand since it’s inception. It’s such a focus of their company that they trade under the stock symbol DTC.
What is interesting about the quarter that just closed is all their growth came from wholesale. They’ve been expanding relationships with brick and mortar retail like Costco and Dick’s Sporting Goods.
While their DTC business was still strong at $160.8 million in revenue on the quarter, it was down from Q4 2021 by 2.1%. Wholesale revenue on the other hand rocketed up 196.4% to $36.5 million from Q4 2021.
Solo Brands CEO John Merris commented on the earnings call that wholesale now makes up about 25% of their total revenue profile. The increase they take as a positive because their data shows that they’re reaching customers that they haven’t previously. They also attribute the decrease in DTC revenue to being from Covid effects in 2021 inflating revenue.
Holding Prices Despite Inflation
Like all businesses, Solo Brands is monitoring the macro environment and the effects of inflation. That hasn’t meant price increases for them though to counter inflation. John Merris noted on the earnings call that their margin profile has allowed them to maintain pricing through Q1.
Investment Focus Areas for 2023
On Solo Brands earnings conference call, John Merris said there are three investment focus areas for 2023.
- Investment in digital and data infrastructure to continue to understand the customer and drive marketing efficiency
- Continued international growth both in existing and in new markets
- Expansion of retail partnerships by making them deeper and selectively picking new partners