Outdoor lifestyle and equipment company Clarus (NASDAQ: CLAR) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 3.3% year on year to $69.35 million. Its non-GAAP profit of $0.05 per share was in line with analysts’ consensus estimates.

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Management Commentary“During the third quarter, we continued to navigate a challenging global consumer landscape,” said Warren Kanders, Clarus’ Executive Chairman.

Company Overview

Initially a financial services business, Clarus (NASDAQ: CLAR) designs, manufactures, and distributes outdoor equipment and lifestyle products.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Regrettably, Clarus’s sales grew at a sluggish 4.2% compounded annual growth rate over the last five years. This fell short of our benchmark for the consumer discretionary sector and is a tough starting point for our analysis.

Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Clarus’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 4.9% annually.

This quarter, Clarus reported modest year-on-year revenue growth of 3.3% but beat Wall Street’s estimates by 4.3%.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. While this projection suggests its newer products and services will fuel better top-line performance, it is still below average for the sector.

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Operating Margin

Clarus’s operating margin has been trending down over the last 12 months and averaged negative 19.2% over the last two years. Unprofitable consumer discretionary companies with falling margins deserve extra scrutiny because they’re spending loads of money to stay relevant, an unsustainable practice.

Clarus’s operating margin was negative 4.4% this quarter. The company's consistent lack of profits raise a flag.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sadly for Clarus, its EPS declined by 16.4% annually over the last five years while its revenue grew by 4.2%. This tells us the company became less profitable on a per-share basis as it expanded.

In Q3, Clarus reported adjusted EPS of $0.05, in line with the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street is optimistic. Analysts forecast Clarus’s full-year EPS of negative $0.08 will flip to positive $0.18.

Key Takeaways from Clarus’s Q3 Results

We were impressed by how significantly Clarus blew past analysts’ EBITDA expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. On the other hand, its EPS was in line. Overall, this print had some key positives. The stock traded up 4.1% to $3.39 immediately after reporting.

Sure, Clarus had a solid quarter, but if we look at the bigger picture, is this stock a buy? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.