Solo Brands (NYSE:DTC) executives used the company’s fourth-quarter and full-year 2025 earnings call to outline progress on a “product-led turnaround” that management says has reshaped the business around cash flow, cost discipline, and margin integrity, even as sales declined sharply during a reset of the Solo Stove go-to-market strategy.
Management highlights “revolution” in 2025 transformation
Chief Executive Officer John Larson, who assumed the CEO role on an interim basis in February 2025 and permanently in June, said the company spent the year executing enterprise-level actions intended to create a “structurally leaner, profit-driven business.” Larson pointed to a refinancing that reset the capital structure, the reinstatement of the company’s New York Stock Exchange listing, and an effort to rebuild relationships with retail partners by introducing greater discipline in marketing, pricing, and promotional activity at Solo Stove.
Sales fell in Q4 as margins held and cost cuts accelerated
Chief Financial Officer Laura Coffey reported consolidated fourth-quarter sales of $94 million, down 34.5% from the prior-year quarter. The decline was driven by lower direct-to-consumer and retail sales, “particularly within the Solo Stove segment.” Coffey noted that while fourth-quarter sales were seasonally higher than the third quarter in absolute dollars, the year-over-year percentage decline narrowed by nearly 10 percentage points compared with the third quarter.
Adjusted gross margin in the fourth quarter was 61%, flat versus a year earlier and up 40 basis points from the third quarter. Coffey attributed the margin performance to a more disciplined and predictable pricing and promotional cadence and said management expects “further margin stability in 2026.”
On expenses, Coffey said the transformation initiative drove a 38.8% year-over-year reduction in fourth-quarter SG&A. She cited lower marketing and distribution costs and tighter overall expense management, with distribution expenses down in line with lower volumes and marketing and other operating expenses declining through “more disciplined, efficiency-focused spending.”
Impairment and restructuring charges weighed on GAAP results
Solo Brands recorded restructuring and impairment charges totaling $75.5 million in the fourth quarter, including $74.1 million of non-cash impairment charges, according to Coffey. Net interest expense was $7.4 million in the quarter, reflecting interest paid in kind on the term loan.
The company reported a fourth-quarter net loss of $83.2 million, which Coffey said was driven primarily by non-cash impairment and restructuring costs. On a non-GAAP basis, adjusted net income was $2.3 million, flat year over year and a sequential improvement from an adjusted net loss of $11.9 million in the third quarter of 2025.
Adjusted EBITDA for the fourth quarter was $9.6 million, or 10.2% of sales, which management said represented a 52% year-over-year improvement and a reversal from negative EBITDA in the third quarter.
Full-year results: sales $317 million; Chubbies grew while Solo Stove reset
Larson said Solo Brands delivered $317 million in net sales in 2025, introduced five new products, and maintained stable gross margins. He said Chubbies posted more than 9% year-over-year growth, driven by online demand and growth in strategic partnerships, while the Solo Stove segment saw declining sales as the company realigned pricing and promotional activity to reinforce pricing integrity and reset retail partnerships.
Coffey provided segment-level figures, saying full-year sales were challenged due to the transformation initiatives at Solo Stove, resulting in net sales of $167.2 million, while Chubbies delivered full-year sales of $122.9 million, up 9.1%.
Larson said Solo Brands generated roughly $19 million of adjusted EBITDA for the full year and highlighted a 52% increase in fourth-quarter adjusted EBITDA as evidence of operating leverage as changes take hold. He also cited a Forbes review that named the all-new Summit 24-inch smokeless fire pit as its best choice in the category for the year.
Cash flow, balance sheet, and 2026 priorities
Management emphasized cash generation throughout the call. Larson said the balance sheet reset in early 2025 drove roughly $75 million of operational cash flows, primarily through settling legacy accounts payable balances, and added that beyond the first quarter the company generated nearly $30 million in operating cash flow. Coffey said operating cash flow was positive for the third consecutive quarter and totaled $28.6 million over the last three quarters of 2025.
On the balance sheet, Coffey said the company ended the year with $20 million in cash and cash equivalents and reduced inventory by nearly 25% year over year through tighter planning and improved supply chain discipline. The debt structure includes a $240 million term loan and a $90 million revolving credit facility, both maturing in 2028. Coffey said the company ended the year with no revolver borrowings outstanding and was in compliance with all financial covenants as of Dec. 31.
Coffey also discussed a previously announced corporate transaction: in December, Solo Brands simplified its organizational structure by eliminating the Up-C structure, “generally limiting the cash impact” of the Tax Receivable Agreement, and moving to a single class of common stock effective Jan. 1, 2026.
Looking ahead, Larson said the company’s objectives are to “stem the sales decline,” invest in profitable growth, and convert revenue into earnings and cash more efficiently. He said the company will focus on profitability at the channel, market, and product level in 2026, continue investing in innovation across Solo Stove and Chubbies, and expand Water Sports assortment through a strategic partnership with Costco. He also called out Dick’s Sporting Goods, Scheels, Ace Hardware, and REI as important retail partners.
During the Q&A, Larson said the fire pit category has been “pretty flat,” with substantial low-end competition, particularly on Amazon. He said unit market share was down, though at a higher average order value. He also said new products represented roughly 25% of Solo Stove’s DTC sales in the fourth quarter and that, in recent days, six of the company’s eight top-selling SKUs were products launched since the fourth quarter of last year.
On costs, Larson said additional reductions are planned for 2026, including further payroll cuts after payroll was down about 27% year over year in the fourth quarter. He said the company is “not counting on revenue to go up dramatically” to drive its model and is working to right-size the business while continuing to invest in innovation.
Coffey reminded investors that the first quarter is seasonally the lightest sales quarter and said the company expects to use the revolving credit facility during the quarter and repay it as cash is generated in subsequent quarters.
About Solo Brands (NYSE:DTC)
Solo Brands, Inc (NYSE: DTC) is an omni-channel outdoor lifestyle company that designs, markets and distributes a portfolio of consumer-focused brands. The company’s core business centers on developing innovative products for outdoor cooking, recreation and hunting enthusiasts. Through a direct-to-consumer e-commerce model and relationships with specialty and mass-market retailers, Solo Brands brings its products to customers in the United States, Canada and select international markets.
The Solo Stove brand offers stainless-steel, smokeless fire pits, portable camp stoves and related accessories designed for backyard and backcountry use.
