AXIL Brands, Inc. Reports First Quarter Fiscal Year 2026 Financial Results

LOS ANGELES, Oct. 07, 2025 (GLOBE NEWSWIRE) — AXIL Brands, Inc. (“AXIL” or the “Company”) (NYSE:AXIL), an emerging global consumer products company for AXIL^® hearing protection and enhancement products and Reviv3^® hair and skin care products, announces its financial results for the first quarter ended August 31, 2025 (“1Q26”).

Financial Highlights for the Quarter Ended August 31, 2025

• Net sales in 1Q26 were $6.9 million, as compared to $5.9 million in the prior year period, an increase of 17.2%
• Gross profit as a percentage of sales was 67.6% in 1Q26, compared to 71.0% in the prior year period
• Operating expenses were 61.6% of net sales in 1Q26, an improvement from 73.4% in the prior year period
• Operating income improved to $0.4 million, or 6.0% of revenue, in 1Q26, from an operating loss of $0.1 million, or (2.4%) of revenue, in the prior year period
• Net income was $0.3 million in 1Q26, compared to a net loss of $0.1 million in the prior year period
• Adjusted EBITDA in 1Q26 was $0.7 million, a 291.3% increase from $0.2 million in the prior year period
• Net cash used in operating activities for 1Q26 was $0.7 million, compared to net cash provided by operating activities of $0.9 million in the prior year period
• Cash on hand as of August 31, 2025 was $4.1 million, compared to $4.8 million as of May 31, 2025
• Basic and diluted earnings per share for 1Q26 were $0.05 and $0.04, respectively, compared to a basic and diluted loss per share of $0.02 in the prior year period

Recent Business Highlights

• Expanded into Costco with the introduction of the XCOR SE earbud (in-store and online at Costco.com) and the X30i filtered earplug bundle pack (Costco.com only)
• Launched the full Reviv3 Procare^® product line in Chatters, Canada’s largest salon retailer with more than 115 salons

“Our first quarter results reflected a revenue mix more heavily weighted to the retail channel than any of our previous quarters. Initial shipment of our AXIL^® hearing products to a new national membership-based retail chain was a key driver of this mix shift and helped our total revenue grow 17% year-over-year,” commented Jeff Toghraie, Chairman and Chief Executive Officer of AXIL.

“The combination of a slight increase in sales and marketing expenses to support this incremental offline retail business, combined with fiscal discipline in managing other corporate expenses, allowed us to demonstrate significant operating leverage in the quarter. Despite the $1 million in revenue growth – or 17% total revenue growth and 25% revenue growth from AXIL-branded hearing products only – in the first quarter of fiscal 2026, operating expenses were flat year-over-year and declined as a percentage of sales to 62% in the quarter from 73% in the prior year period. The result was an increase of $0.4 million in net income from a net loss of $0.1 million in the first quarter of fiscal 2025 to net income of $0.3 million in the first quarter of fiscal 2026 and an increase of $600,000 in EBITDA on a year-over-year basis and a swing to positive EBITDA for the quarter. The combined effect of higher revenue, a greater wholesale mix, and expense control led to solid profitability and diluted earnings per share of $0.04 in the first quarter of fiscal 2026 versus a diluted loss per share of $0.02 in the first quarter of fiscal 2025.

“Over the last 18 months, our strategic focus has been to diversify our revenue channel mix and develop a more stable and balanced mix of online sales via our own e-commerce website, offline retail, and international distribution. Historically, our e-commerce channel has accounted for an overwhelming majority of our revenue, but in the first quarter of fiscal 2026, we saw clear signs that our strategy is working, and our financial results reflect this progress. An increased mix of wholesale retail revenue should continue to benefit the Company, as this channel offers greater profitability and operating leverage than our online e-commerce channel. While gross margins alone are slightly higher in the e-commerce channel than in the wholesale channel, our online sales also carry with it greater sales and marketing expenses and customer acquisition costs than the offline retail channel.

“We continue to look for additional retail distribution channels for our advanced hearing enhancement and protection products. An increased retail presence, along with the benefits of our historical and current online marketing efforts, should help raise customer awareness and turn AXIL products into a sought-after hearing protection and enhancement brand on the market.

“Along with a goal of increased retail presence, we will continue to innovate to deliver high-performance, ergonomic, and desirable products. Our product roadmap includes the introduction of numerous new products or next-generation products in the coming two to three quarters, beginning with the next generation GS Extreme 3.0 product that is set to launch in time for the holiday season.

“Turning to the balance sheet, inventory increased appreciably, though that was expected given the increased product supply needed to service our wholesale segment and an initial purchase order from a new customer. We expect that to normalize over time. Cash at the end of the first quarter of fiscal 2026 was $4.1 million, which we believe is sufficient for us to internally fund our strategy and growth objectives.

“Lastly, I’d like to provide some insights on our hair and skin care segment that sells our flagship Reviv3^® line of hair care products. While much of our resources over the last few years have been focused on growing the hearing protection segment, we see a pathway for the hair and skin care segment to become more than just a dormant or hidden asset for the Company. We have already made strategic leadership additions to that business segment and expect to further bolster the team with additional experienced leaders with proven success in the beauty industry. Our new relationship with Chatters, Canada’s premier salon chain, was established shortly after bringing on a new leader, indicating that leadership can make a meaningful impact. We are optimistic that making leadership additions to this segment will be accretive to the Company and deliver sustainable shareholder value, especially in the professional beauty channel.

“We remain focused and disciplined in our execution as we strive for meaningful long-term growth across both of our product segments. We have built a strong foundation that supports sustainable growth and operational efficiencies and are encouraged by our first quarter results and the business trends seen thus far in fiscal 2026,” concluded Mr. Toghraie.

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 (loss), calculated in accordance with GAAP is included in a schedule to this press release.