Clarus Corp.'s momentum in 2018 continued into the first quarter of 2019, with sales growth across every brand, category, geography and channel. The parent company of Black Diamond, Pieps and Sierra Bullets saw its net income soar to $3.8 million for the three months ended on March 31, compared with $403,000 last year, as sales jumped by 15 percent to a record $61.2 million. This included a 19 percent gain in domestic sales to $30.5 million and an 11 percent improvement in international sales to $30.6 million.
Black Diamond, the biggest brand of the group, contributed a sales increase of 16 percent, while the recently added Sierra Bullets operation contributed a sales increase of 7 percent.
The management said this performance was the result of product innovation, as well as better order fulfillment and effective marketing campaigns. This led to continued gross margin and Ebitda expansion. A significant driver of this performance was also the favorable winter weather, which extended late into the season in both the U.S. and Europe and drove 49 percent year-over-year growth within ski hardgoods.
In addition, the shipment of the new Black Diamond beacon products had a positive impact, as it moved from the fourth quarter of last year into the first quarter of this year. Hardgoods in the mountain and climb segments were both up by 12 percent.
Elsewhere, Clarus' apparel program produced an 18 percent gain and the Sierra bullet division had a 7 percent sales increase, despite a sluggish ammunition market in the U.S.
The gross margin improved by 2.5 percentage points to 36.0 percent, primarily due to a favorable brand mix and an inventory fair-value adjustment that was incurred in the first quarter of 2018. This was partially offset by foreign exchange headwinds from the strengthening of the U.S. dollar, as well as impacts from channel mix.
The adjusted Ebitda margin soared by 3.7 percentage points to 11.8 percent.
The company is implementing two product extensions, including an entry into approach shoes to supplement its climbing shoe line. As previously reported, it is also entering the natural skincare market with its recent acquisition of the assets of Skinourishment, the parent company of ClimbOn and other skincare brands.
Clarus reiterated its full year guidance calling for sales of around $230 million and adjusted Ebitda of $25 million. The Black Diamond brand should grow by high-single to low-double digits, while Sierra is targeted for a low-single-digit gain.
