Byrna Technologies Stock Earnings Reports

Byrna reported Q2 FY26 revenue of $16.4M, well below management expectations and down materially vs. prior year ($28.5M). Management attributes the shortfall to two primary factors: weaker e-commerce (website sessions down ~13% YoY and conversion falling from ~1.0% to ~0.59%) and slower retail sell-through following elevated post-holiday restocking in Q1. The quarter included significant one-time charges tied to a strategic shift in manufacturing: a $3.6M inventory write-down, a $3.5M impairment on manufacturing equipment, and a $2.3M inventory reserve related to product rationalization tied to the Fort Wayne ammunition facility closure. Excluding these items, adjusted gross profit was $10.1M, implying an adjusted gross margin around 62%, which management expects to sustain near or above for the remainder of the year. Cash and marketable securities were $10.4M at quarter end, with no debt. Management is executing a multi-point turnaround focused on (1) improving consumer conversion and retail productivity (site improvements, guided product selection, try-before-you-buy pilot, better in-store education/endcaps), (2) rebuilding demand generation (broader audience targeting, new agencies HLK and Acceleration Partners, Fox Sports activation, ramping TV) and (3) tighter linkage between demand, production, inventory and cash (reducing assembly lines, outsourcing ammunition manufacturing, rolling forecast model). They agreed to acquire Hero Defense Systems (small cash and stock consideration plus performance royalty) to add lower-priced, less-gun-forward products and expand the product ladder. Management expects FY26 to be a reset year (not a revenue growth year), with sequential improvement in H2 and a stronger Q4 tied to holiday merchandising and ramped marketing. They are investing ahead of revenue ramp (marketing agency & hires ~ $250k/month; ~ $750k/quarter) but are also managing other operating expenses; target inventory turns ~2x by year-end and a targeted ~$5M inventory reduction to generate cash.