Solo Brands had some surprising news today. They lowered their guidance for 2023, and also they replaced their CEO, John Merris, who has overseen huge growth by the brand over the past five years.
While Solo Brands started out as a direct-to-consumer (DTC) company, they’ve since been transitioning away from that. Their growth in recent quarters has come from their wholesale channel business, while their DTC business has seen decreases. It appears that trend has strengthened and it’s hurting their results.
Our fourth quarter results came in below expectations as we experienced softer-than-anticipated sales in our direct channel. While our unique marketing campaigns raised brand awareness of Solo Stove to an expanded and new audience of consumers, it did not lead to the sales lift that we had planned, which, combined with the increased marketing investments, negatively impacted our EBITDA. We believe there is a significant opportunity for us to build awareness and that these new campaigns will expand our reach and benefit our brands over the long term.Andrea Tarbox, interim CFO of Solo Brands
What’s worse about their updated guidance is they just affirmed their guidance in November, so this is unexpected.
In what was surprising news, Solo Brands announced a CEO transition today. Not only was it surprising that their CEO was leaving, it was surprising that who is replacing him.
Their new CEO is Chris Metz. If that name sounds familiar, it’s because he was the CEO of Vista Outdoor, the parent company of Camp Chef.
We are thrilled to welcome Chris to Solo Brands as our new CEO. Chris is known for building high performing teams, driving growth and transforming companies. His experience across leading outdoor products companies, including Vista Outdoor, makes him the perfect leader for Solo Brands’ future. Our board is confident that Chris is the right person to grow shareholder value.Matt Hamilton, Chairman of Solo Brands’ Board of Directors
This leadership transition is on the heals of another executive transition at Solo Brands. They announced last November, that their CFO was also leaving the company.