Shares of AXIL Brands, Inc. (AXIL Quick QuoteAXIL - Free Report) have declined 5.2% since reporting results for the fourth quarter of fiscal 2025. This compares with the S&P 500 index’s 0.4% fall over the same time frame. Over the past month, the stock has lost 14.5% against the S&P 500’s 1.7% growth.

AXIL reported net sales of $26.3 million for fiscal 2025, down 4.5% from $27.5 million a year earlier. Gross profit also contracted to $18.6 million from $20.2 million, with the gross margin slipping to 71% from 73.4%.

Net income declined significantly to $0.9 million in fiscal 2024 from $2 million a year earlier, resulting in basic earnings per share (EPS) of 13 cents, compared with 57 cents in the previous year. On the positive side, adjusted EBITDA rose 21.3% to $2.4 million, representing 9.3% of sales versus 7.3% a year earlier. The operating cash flow also improved markedly, generating $1.9 million versus only $3 thousand in fiscal 2024.

AXIL Brands, Inc. Price, Consensus and EPS Surprise

 

AXIL Brands, Inc. price-consensus-eps-surprise-chart | AXIL Brands, Inc. Quote

Other Key Business Metrics

The company showed meaningful progress in strengthening its balance sheet. Cash on hand rose to $4.8 million at the end of May 2025 from $3.3 million in the prior year. Inventory declined to $2.5 million from $3.4 million, reflecting improved working capital management. At the same time, accounts receivable nearly doubled to just more than $1 million, hinting at stronger sales momentum late in the year or extended collection cycles.

Operating expenses represented 66.6% of sales in fiscal 2025, improving from 67.9% a year earlier. This efficiency gain stemmed primarily from reduced sales and marketing expenses, which fell to $11.7 million from $13.4 million. However, this was partly offset by higher professional and consulting costs, which rose to $3.3 million from $2.7 million.

Management Commentary

Chief executive officer Jeff Toghraie highlighted fiscal 2025 as “a pivotal year” for AXIL, marking its third consecutive year of profitability despite global trade headwinds. He emphasized the company’s disciplined approach in balancing marketing and operating expenses while continuing to invest in innovation and customer engagement.

Management stressed that the gross margin remained robust at 71% despite modest revenue declines, reflecting a focus on product mix and efficiency initiatives. Toghraie also pointed to significantly stronger operating cash flow as evidence of AXIL’s financial discipline. Importantly, he underscored progress in reshaping the supply chain, particularly through the relocation of manufacturing to the United States to mitigate tariff exposure and build long-term resilience.

Factors Influencing Results

The decline in revenues was partly attributed to ongoing global trade challenges, including tariffs and supply-chain disruptions. The company’s cost structure, however, improved meaningfully, with lower marketing outlays and tighter expense controls helping sustain profitability. The decision to advance U.S.-based manufacturing played a role in offsetting tariff-related cost pressures.

Additionally, AXIL continued to diversify its brand portfolio. While its flagship hearing protection products remained a steady contributor, management drew attention to early momentum in its Reviv3 hair and skin care division, supported by new leadership hires and initial traction in market expansion.

Guidance

For fiscal 2026, management projected strong momentum, driven by a major wholesale agreement with one of the nation’s largest membership-based retailers. The partnership, which includes an initial purchase order in the first quarter of fiscal 2026, is expected to provide a meaningful lift to revenues and brand visibility. Management noted that this milestone should help expand AXIL’s national reach, enhance consumer awareness and support long-term growth.

Management reiterated confidence in scaling multi-channel distribution, accelerating product innovation, and maintaining financial flexibility without reliance on external capital.

Other Developments

In fiscal 2025, AXIL launched Sharper Vision Marketing, a wholly-owned subsidiary intended to monetize the company’s internal digital marketing expertise while reducing its customer acquisition costs. The company also advanced its operational realignment efforts, emphasizing the transition of its supply chain to the United States. Additionally, AXIL made a key leadership appointment to bolster its Reviv3 segment, signaling its intent to accelerate growth in the hair and skin care market.

In summary, while AXIL Brands’ fiscal 2025 results reflected revenue and earnings pressures compared with the prior year, management highlighted improved cash flow, stronger adjusted EBITDA margins and strategic initiatives designed to enhance long-term growth. The company’s success in securing a major wholesale distribution deal and strengthening its supply-chain resilience provides a constructive backdrop heading into fiscal 2026.