Overview
- For the fiscal second quarter ended Sept. 30, net sales rose 14% to $343.9 million, missing estimates, and adjusted EPS came in at $0.68.
- The company guided fiscal 2026 net sales to $1.55–$1.57 billion, adjusted EPS to $2.80–$2.85, and adjusted EBITDA to $302–$306 million, all below consensus.
- Operating margin fell to 2.2% from 9.3% as gross margin contracted about 165 basis points to 69% and adjusted SG&A reached roughly 56% of sales, with management pointing to higher tariffs and increased marketing.
- Rhode contributed about $52 million in the quarter and is forecast at roughly $200 million for the year with a $300 million run rate, while organic sales declined about 3% and a shipment pause tied to a $1 price increase has been resolved.
- Shares dropped more than a third following the update, and Piper Sandler downgraded the stock as TD Cowen and Jefferies cut price targets.