Grilla Grills’ parent company, American Outdoor Brands (NASDAQ: AOUT), released earnings yesterday for their quarter and year that ended April 30th, 2024. Unlike many other outdoor companies this earnings cycle, they turned in some good growth with a 5.2% organic revenue increase year-over-year.
Mix Shift to Outdoor Lifestyle
AOUT was spun out of Smith & Wesson, so they have shooting sports brands and outdoor lifestyle brands. While 54.3% of their sales in fiscal year 2020 were from shooting sports brands, that mix has now shifted to 54.4% outdoor lifestyle.
That mix shift is something that expect to continue to happen as their outdoor lifestyle brands are growing more quickly. AOUT’s inorganic growth (M&A) has also been focused on outdoor lifestyle, which would also accelerate the mix shift.
I will tell you, just to give you this insight, most of the deals that we’re looking at, and perhaps not surprisingly, are on the outdoor lifestyle side of the business. It’s not because we’re trying to not pursue anything on the shooting sports side, but certainly there are more opportunities on the outdoor lifestyle side and I think as a company we have more permission to play there. So that’s where most of our focus lies today.
Brian Murphy, President and CEO of American Outdoor Brands
Retail Expansion
AOUT brought their food processing brand MEAT! Your Maker to retailers over the past year, which has laid the groundwork to do the same with their other DTC brand, Grilla Grills. We should expect to see Grilla at retail here shortly.
We said we would lay the groundwork to expand our Grilla brand into retail as well. We completed that work and Grilla is set to enter the retail channel in the coming months.
Brian Murphy, President and CEO of American Outdoor Brands
They’ve been working on getting Grilla ready for retail, which has some different elements than selling DTC. One good example is having good packaging to help sell the products.
…we got to make sure that we’re set to go with Grilla to go into retail. The packaging, you know, this is kind of the boring stuff, but you can’t really take a blank cardboard box that says Grilla on it and put it on a shelf.
Brian Murphy, President and CEO of American Outdoor Brands
They haven’t announced what retailer or retailers will carry Grilla, other than it’s one they currently work with. My guess is it will be Academy Sports, who has been growing their grill selection and has had success with the MEAT! brand.
And so, you know, Academy was the first retailer that we worked with on the Meat brand. They’ve done an absolutely incredible job, have been a great partner for us. And what’s interesting is in turn has also given us more eyeballs on our website. So, we’ve seen a nice pickup in some of the accessory items and things or maybe some products that are not sold at Academy. And so, it’s actually been a win-win for us in that situation.
Brian Murphy, President and CEO of American Outdoor Brands
MEAT! is also starting to be retailed at Tractor Supply, who also has been expanding their grill offerings, and services a more rural market.
Innovation
Grilla Grills introduced the Mammoth vertical pellet smoker over the past year, which has been a big success for them. If you follow their various communication channels, you’d know they always seem to be advertising that they’re getting more in stock, which means they’re selling out.
I mean, new products was a big part of the year at 23% of our net sales.
Brian Murphy, President and CEO of American Outdoor Brands
Innovation is great for sales in general, but AOUT expects it to be especially impactful with their expansion into retail.
And we’ve got such a robust product pipeline in place for both Meat and Grilla, which retailers are going to be able to accentuate that and really represent the brand the way it needs to be a retailer.
Brian Murphy, President and CEO of American Outdoor Brands
Beyond selling grills at retail, AOUT had another interesting bit of information. They’re going to also sell their modular kitchen at retailers as well, which is a differentiator for their brand, and represents a new category at retail.
And I think, you know, products like the vertical smoker, the mammoth vertical smoker, are really going to be, I’ll call them halo products, as we begin to bring that brand into retail. There’s just a tremendous amount of consumer excitement with that brand and with that product especially. And the retailers are really excited about the modularity of the kitchen. It’s something that’s for most of them entirely new and that’s really what they’re looking for.
Brian Murphy, President and CEO of American Outdoor Brands