Many companies in the live-fire industry are searching for the bottom. Revenues have been under pressure for years, so with that, there has been continual operating expense right-sizing. Ooni just found a bottom last year, but Solo Brands is still searching.
They reported Q3 2026 earnings today, and it was another quarter of revenue decline. It’s their slowest quarter seasonally, but sales were down 17.6% from last year.
We continue to streamline fulfillment and simplify operations, having reduced our U.S. distribution footprint from 5 facilities in 2025 to 1 and cut third quarter SG&A by 20%. Since year-end, we have reduced inventory by about $22 million to $59 million and generated more than $26 million of operating cash flow and ended September with $40 million of cash, up from $35 million at the end of June. We recognize the importance of driving top line growth and know we have more work to do on our capital structure. These priorities are how we attend to achieve consistent profitability and cash generation and create long-term shareholder value.
John Larson, President and CEO of Solo Brands
Their streamlining activities have yielded results on the bottom line. That’s the good news from their quarter. It’s just hard when you keep shrinking the top, so you don’t know how much, or if, you need more cuts.
It’s also important to keep in mind that some of the revenue decline is planned to yield better margins. Prior to restructuring their business they were always discounting. That’s a practice they have gotten away from as they work to establish minimum pricing and improved retail relationships.
All 3 segments were profitable on a segment adjusted EBITDA basis, with Stove and Chubbies improving and Watersports roughly flat without corporate costs allocated. These results reflect deliberate choices, a leaner cost structure, tighter inventory and being less promotional overall. Our philosophy has been to strengthen the foundation first, then accelerate growth, and we believe our actions have strengthened that foundation. Through 9 months, adjusted EBITDA was $13 million, up from $8.9 million last year, and operating cash flow was $26 million compared with the use of cash a year ago. Our job now is to turn that foundation into profitable growth.
John Larson, President and CEO of Solo Brands
The main problem that Solo Stove is running into is they are losing shelf space from their core products at retailers. To combat that, they’re going back to what drove growth in the first place for the brand, innovation.
Their new Chiminea topper and the premium propane fire pit are products that they quickly developed, and have been some of their best sellers. Adding innovation, they are hoping, will fill the shelf space that was vacated by their core fire pits.
The reality is to have long-term success, we need to be an omnichannel brand. And that means selling through each and every category. It takes a while to get the new product into the retail channel. And quite frankly, the retail channel on the Stove side has had the decline in the legacy pits. They’ve drawn back on how much of their shelf space is dedicated to fire pits. So we need to bring the new products in.
Now fortunately, we have some tests going in place. The new Infinity Flame premium, we call Teak Steel, has gone into a number of stores with tests and it seems to be selling through very well. So really relying on these new products and getting them further into our retail channel, which has really been devastated by the reduction in kind of the core business out there is going to be critical to turning it around in ’27. But do I think it’s a possibility? Absolutely. We need to turn it around in ’27.
John Larson, President and CEO of Solo Brands