DTC - Solo Brands tops Q4 earnings estimates offers light sales guide

2023-03-09 07:19:45 ET

Solo Brands ( NYSE: DTC ) stock rose sharply in premarket trading on Thursday after the company topped Q4 earnings estimates by a wide margin.

A report of $0.33 in earnings per share for the fourth quarter was $0.10 above expectations. Meanwhile, an 11.7% jump in revenue ripped $40.79M above consensus estimates. Gross margin decreased by 350 basis points year over year, which management attributed to a shift in sales channel mix with greater growth in wholesale sales. Higher freight costs also impacted margins.

“Our fourth quarter and full year 2022 results surpassed our expectations and showcased our differentiated model that delivers top-line growth with solid adjusted EBITDA and positive free cash flow. Throughout 2022 our team executed our playbook, and as a result, our direct-to-consumer, wholesale and international businesses all grew,” CEO John Merris said. “In 2023, while the macro conditions create ongoing uncertainty, we remain confident in our brands and our game plan and look forward to executing our near and long-term strategies.”

Moving forward, management expects revenue to range from $520M to $540M for 2023, suggesting some downside to the Street consensus of $538.56M. Adjusted EBITDA margin is expected to be between 16.5% to 17.5% for the full-year.

Shares of the Texas-based direct to consumer company rose 4% before the bell on Thursday.

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