LOS ANGELES, April 08, 2026 (GLOBE NEWSWIRE) -- AXIL Brands, Inc. ("AXIL, " "we," "us," "our," or the "Company") (NYSE American: AXIL), an emerging global consumer products company for AXIL$(R)$ hearing protection and enhancement products and Reviv3(R) hair and skin care products, and marketing services for third-party brands today announced financial and operational results for the third fiscal quarter ended February 28, 2026 ("Q3 2026").

Financial Highlights for the Quarter Ended February 28, 2026

   -- Net sales increased 5.4% in Q3 2026 to $7.3 million, compared to $6.9 
      million in the prior year period 
 
   -- Gross profit was largely unchanged at approximately $5.0 million for both 
      periods, representing 69.1% gross margin in Q3 2026, compared to 71.7% in 
      the prior year period 
 
   -- Operating expenses of $4.8 million were 66.2% of net sales in Q3 2026, 
      compared to $4.4 million, or 63.3% of sales in the prior year period 
 
   -- Net income in Q3 2026 was $0.2 million, or $0.02 per diluted share 
      compared to $0.6 million, or $0.07 per diluted share in the prior year 
      period 
 
   -- Adjusted EBITDA in Q3 2026 was $0.5 million, compared to $0.9 million in 
      the prior year period 
 
   -- Net cash provided by operating activities for the nine months ended 
      February 28, 2026 was $0.8 million, compared to $1.7 million in the prior 
      year period 
 
   -- Cash on hand as of February 28, 2026 was $5.5 million, representing an 
      increase of $700,000 compared to $4.8 million as of May 31, 2025 

Operations Update:

   -- Announced new order with Home Depot to distribute three high performance 
      products through its on-line platform 
 
   -- Announced that Sportsman's Warehouse will distribute two products, GSX 3 
      and XCor Pro, which will be available at 70 national stores and on-line 
 
   -- Announced 3,700-store rollout with Walmart beginning first half of 
      calendar 2026 
 
   -- Announced expansion of licensing agreement with Monster Jam 

Quarterly Results:

Net sales increased by $371,663, or 5.4%, to $7,294,030 for the three months ended February 28, 2026, compared to $6,922,367 for the prior-year period, primarily driven by continued growth in demand for our hearing enhancement and protective equipment products, and partially offset by lower sales in our hair and skin care segment, which were impacted by the absence of a significant distributor order that was fulfilled in the prior-year period.

Cost of sales increased by $296,270 or 15.1% from $1,955,939 in the three months ended February 28, 2025 to $2,252,209 in the three months ended February 28, 2026. Cost of sales as a percentage of net revenues for the three months ended February 28, 2026 was 30.9% as compared to 28.3% for the three months ended February 28, 2025. Cost of sales as a percentage of revenue increased primarily due to increased tariffs.

Gross profit increased by $75,393 or 1.5% from $4,966,428 in the three months ended February 28, 2025 to $5,041,821 for the three months ended February 28, 2026. Gross profit as a percentage of sales for the three months ended February 28, 2026 was 69.1%, as compared to 71.7% for the three months ended February 28, 2025. Gross profit as a percentage of sales decreased primarily due to higher customs duties.

Operating expenses increased by $444,263 or 10.1% from $4,383,319 in the three months ended February 28, 2025 to $4,827,582 in the three months ended February 28, 2026. Operating expenses as a percentage of net revenues for the three months ended February 28, 2026 was 66.2% compared to 63.3% for the three months ended February 28, 2025. Operating expenses increased primarily due to higher sales and marketing expenses of approximately $400,000, reflecting increased investment in retail sales promotional initiatives and efforts to enhance overall brand awareness.

Income from operations for the three months ended February 28, 2026, was $214,239 compared to $583,109 for the three months ended February 28, 2025. The decrease in income from operations of $368,870 related primarily to an increase in sales and marketing costs as explained above.

Net income was $203,046 and $576,662 for the three months ended February 28, 2026 and 2025, respectively.

Adjusted EBITDA decreased by $419,752 or 47.1% from $890,546 for the three months ended February 28, 2025 to $470,794 for the three months ended February 28, 2026. Adjusted EBITDA as a percentage of sales, net for the three months ended February 28, 2026 and 2025, was 6.5% and 12.9%, respectively. Adjusted EBITDA decreased primarily due to an approximately $400,000 increase in retail sales and marketing expenses, reflecting continued investment in our channel diversification strategy and broader brand-building initiatives aimed at driving long-term revenue growth.

Management Commentary:

"Seasonal order patterns coupled with incremental spending required in connection with our retail distribution expansion temporarily compressed our margins and bottom line in the fiscal third quarter of 2026. That said, we are on track for a strong finish to the year, and expect the increased investment in marketing and customer experience to drive long-term revenue expansion, deepen brand awareness, and strengthen our competitive position now and for the future. We have maintained our profitability, maintained the integrity of our balance sheet, and we're looking ahead to some very exciting milestones in the future, as we execute on our strategy to scale AXIL into a multi-channel, high-growth consumer platform.

"Our hearing protection business remains the engine of growth, supported by expanding national retail partnerships and increasing demand across both professional and consumer markets, and the use-case is expanding as more retailers like Walmart sign on with us and carry our products. We estimate that our total store count where Axil products are currently being sold is approximately 6,000 compared to less than 1,800 at the end of last year, and believe that looking forward, there is an opportunity for AXIL products to reach a store count that is significantly higher than where it is today.

"As we move through the remainder of fiscal 2026, we remain focused on disciplined execution, scaling revenue, optimizing our cost structure, and capitalizing on the significant opportunities in front of us. We believe AXIL is still in the early stages of its growth trajectory, and we are confident in our ability to build a larger, more profitable, and more valuable company for our shareholders," concluded Mr. Toghraie.

Fourth Quarter and Fiscal Year 2026 Outlook

Based on our current visibility and assumptions regarding continued retail expansion and other factors, we expect revenue for the fourth quarter of fiscal 2026 to be in the range of $8 million to $10 million, representing approximately 39% to 74% year-over-year growth, with gross margins for the fourth quarter of fiscal 2026 to be in the range of 67% to 71%. For the full fiscal year 2026, we expect revenue in the range of $30.2 million to $32.2 million, which implies 15% to 23% growth compared to fiscal 2025.

Store Count

The Company believes that the number of retail stores selling its products is an important indicator of growth. Store count is measured as of the end of the fiscal quarter. The Company cannot provide any assurance that it will achieve the anticipated growth in store count.

Use of Non-GAAP Financial Measures

The Company calculates EBITDA by taking net income calculated in accordance with accounting principles generally accepted in the United States ("GAAP"), and adjusting for income taxes, interest income or expense, and depreciation and amortization. The Company calculates adjusted EBITDA as EBITDA, further adjusted for stock-based compensation. Adjusted EBITDA is also presented as a percentage of revenue, which is calculated by dividing the non-GAAP Adjusted EBITDA for a period by revenue for the same period. Other companies may calculate EBITDA and adjusted EBITDA differently, limiting the usefulness of these measures for comparative purposes. The Company believes that these non-GAAP measures of financial results provide useful information regarding certain financial and business trends relating to the Company's financial condition and results of operations, and management considers EBITDA and adjusted EBITDA important indicators in evaluating the Company's business on a consistent basis across various periods for trend analyses. These non-GAAP financial measures exclude significant expenses and income that are required by GAAP to be recorded in the Company's financial statements and are subject to inherent limitations as they reflect the exercise of judgments by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. Investors should not rely on any single financial measure to evaluate our business. A reconciliation of EBITDA and Adjusted EBITDA to the most comparable financial measure, net income, calculated in accordance with GAAP is included in a schedule to this press release.

 
AXIL BRANDS, INC. AND SUBSIDIARIES 
 CONSOLIDATED EBITDA and ADJUSTED EBITDA 
 FOR THE THREE AND NINE MONTHS ENDED FEBRUARY 28, 2026 
 AND 2026 
 (Unaudited) 
 
                    For the Three Months Ended       For the Nine Months Ended 
                           February 28,                     February 28, 
                       2026            2025            2026             2025 
Net income (GAAP)   $  203,046      $  576,662      $ 1,242,223      $ 1,100,563 
    Provision for 
     income taxes       64,306          53,085          412,479          120,335 
    Interest 
     income, net       (31,297)        (42,920)         (98,774)         (97,595) 
    Depreciation 
     and 
     amortization       54,370          45,666          183,971           93,001 
Total EBITDA 
 (Non-GAAP)            290,425         632,493        1,739,899        1,216,304 
 

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April 08, 2026 08:10 ET (12:10 GMT)