Shares of AXIL Brands, Inc. AXIL have risen 5.4% since reporting results for the fourth quarter of fiscal 2026. This compares with the S&P 500 index’s 0.3% decline over the same time frame. Over the past month, the stock has gained 14.7% compared with the S&P 500’s 0.9% return.
For the fiscal fourth quarter ended May 31, 2026, AXIL reported record net revenues of $8.6 million, up 48.9% from $5.8 million in the year-ago period. Earnings were 18 cents per share against a loss of 4 cents a year earlier. Net income was $1.5 million against a net loss of $245,575. Gross profit increased 53.3% to $6.2 million from $4 million, while the gross margin expanded to 72% from 70%. Income from operations rose to $1.4 million from $46,087 in the year-ago period.
Retail Expansion Supports Operating Performance
The quarter’s revenue growth was primarily driven by sales to big-box retail chains within AXIL’s hearing enhancement and protection business. Cost of revenues increased 38.7% year over year to $2.4 million, slower than revenue growth, helping improve the quarterly gross margin. Lower customs duties and customs-duty refunds also supported margins, although the growing contribution from big-box retailers carried tighter margins than the company’s direct-to-consumer channel.
Operating expenses rose 18.6% year over year to $4.7 million from $4 million in the prior-year quarter. However, operating expenses declined to 55.1% of revenues from 69.2%, reflecting improved operating leverage. Adjusted EBITDA increased to $1.7 million from $353,512, while the adjusted EBITDA margin expanded to 20.3% from 6.1%.
AXIL ended fiscal 2026 with $4.5 million in cash compared with $4.8 million a year earlier and had no outstanding borrowings. Accounts receivable increased to $4.7 million from $1 million, while inventory rose to $4.4 million from $2.5 million. The increases reflected, in part, the timing of material retail orders late in the fiscal year.
Management Points to Broader Distribution
Management attributed the quarter’s performance to investments in distribution, product innovation and operating infrastructure. AXIL expanded its Walmart relationship to approximately 1,250 locations and entered about 70 Sportsman’s Warehouse locations. Its full product line also became available at U.S. Marine Corps Exchange locations beginning in July 2026. Management estimated the company’s total retail presence at approximately 6,000 locations compared with roughly 1,800 at the end of the prior fiscal year.
The company also broadened its hearing-protection portfolio with the MX II Series, powered by SonicShieldX technology, and the AXIL CRX in-ear platform. Management said that the expanded retail footprint and product lineup position the business for a multi-year growth trajectory, while emphasizing consistent execution and sustainable returns.
Channel Mix & Tariffs Shape Results
AXIL’s shift toward retail and wholesale sales has become an increasingly important earnings factor. For fiscal 2026, retail and wholesale revenues in the hearing enhancement and protection segment increased 136.9%, while direct-to-consumer revenues declined 4.3%. Although retail expansion supports volume and distribution, management noted that wholesale sales generally carry a lower gross margin than direct-to-consumer transactions.
Tariffs also affected the results. AXIL paid approximately $900,000 in IEEPA duties through May 31, 2026. Subsequent to the year-end, the company received approximately $910,000 of refunds, including interest. These amounts were not recognized in fiscal 2026 and are expected to benefit the fiscal 2027 results, including the gross margin, although management cautioned that the benefit will not reflect underlying operating performance.
FY27 Outlook
AXIL expects to remain profitable and generate positive cash flow in fiscal 2027. Management also plans a September 2026 relaunch of the Reviv3 hair and skin care brand, and expects to add distributors and retailers in selected domestic and international markets during the second quarter of fiscal 2027, while noting uncertainty around the timing and volume of potential orders.
Other Developments
In February 2026, AXIL formed Reviv3 ProCare Company, a wholly-owned Delaware subsidiary, to support the strategic development of its Reviv3 hair and skin care business. The company now operates primarily through three segments — hearing enhancement and protection, hair and skin care, and marketing services.
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AXIL Brands, Inc. (AXIL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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