BYRN Q2 2025: Compact Launcher Lifts Dealer Sales 106% as Brick & Mortar Footprint Expands
Berna’s second quarter revealed a decisive channel shift as the Compact Launcher debut propelled dealer sales up 106%, with brick-and-mortar expansion now the primary growth lever. Management’s focus on deeper retail partnerships, new recurring revenue models, and operational streamlining positions BYRN to sustain double-digit growth even as consumer sentiment softens. Investors should watch the channel mix evolution, normalization of inventory, and early signals from new insurance and connected device offerings as the next phase unfolds.
Summary
- Channel Shift Accelerates: Dealer and chain store expansion now outpaces DTC as the key growth driver.
- Operational Leverage Emerges: Pod-based manufacturing and margin-accretive products support profitability amid higher OpEx.
- Recurring Revenue Initiatives: Subscription-based BurnaCare and smart launcher connectivity aim to diversify future income streams.
Performance Analysis
Berna delivered a standout quarter marked by a 41% year-over-year revenue gain, reaching $28.5 million, with gross margins holding steady at 62%. The launch of the Compact Launcher (CL), a smaller, higher-margin personal safety device, was the catalyst—driving both direct-to-consumer (DTC) and especially dealer channel growth. Dealer sales surged 106% year-over-year, propelled by initial stocking orders from Sportsman’s Warehouse, which alone accounted for $2.4 million of the $3.9 million dealer sales increase.
Operating expenses climbed in tandem, up $3.6 million year-over-year, reflecting higher variable selling costs, marketing investment, and payroll, as well as launch-related expenses for the CL. Despite these pressures, net income improved to $2.4 million, and adjusted EBITDA reached $4.3 million, reflecting continued operational discipline. Inventory rose sharply to $32.3 million as the company built stock ahead of the CL launch, but with production now normalized and no debt outstanding, management expects cash balances to rebound in the coming quarters.
- Dealer Sales Surge: Sportsman’s Warehouse partnership and broader chain adoption drove a 106% jump in dealer sales, shifting the revenue mix.
- Gross Margin Stability: Favorable product mix from the CL launch offset channel mix effects, maintaining gross margins at 62% despite higher dealer contribution.
- Inventory Spike: Inventory built ahead of the CL launch pressured cash, but normalization is underway as production adjusts to demand.
International sales also saw an 86% increase, aided by a one-time royalty bump from Latin America. DTC channels, including Amazon and Burna.com, grew $2.2 million, but management now sees brick-and-mortar as the primary engine for incremental growth.
Executive Commentary
"The sales momentum from the launch of our compact launcher in May catapulted us to a new quarterly revenue record... We achieved this significant 41% year-over-year growth despite the slowdown in consumer spending and the subdued sales in April that we saw while people waited for the launch."
Brian Gantz, CEO
"The introduction of the Compact Launcher led to a favorable product-sales mix that offset any decrease due to a change in channel mix from stronger dealer sales."
Lori Kearns, CFO
Strategic Positioning
1. Brick-and-Mortar Expansion as Growth Lever
Berna is aggressively scaling its retail footprint, with Sportsman’s Warehouse serving as a flagship partner. The company expects to be present in approximately 140 Sportsman’s locations by year-end, utilizing a mix of store-within-a-store concepts, shooting pods, and point-of-sale displays. This expansion is supported by in-store “Burna Geniuses” and sales incentives, aiming to replicate the profitability of company-owned stores—currently averaging $800,000 in annualized sales per location.
2. Channel Mix Evolution and Amazon Scaling
Dealer and chain store channels now outpace DTC in growth, with Amazon’s inclusion of the CL (and Prime Day participation) expected to further accelerate visibility and sales. Management remains agnostic on DTC vs. Amazon due to similar net margins, citing offsetting savings on fees and advertising costs. Berna is also working closely with Sportsman’s to unlock e-commerce potential, leveraging its 7.5 million monthly visitors.
3. Recurring Revenue and Product Innovation
Berna is moving toward a hybrid product-subscription model, launching BurnaCare, an insurance-like subscription for device replacement, and planning to embed connectivity in future launchers for emergency services integration. These initiatives are designed to create predictable, high-margin recurring revenue streams and deepen customer engagement, a notable shift for a traditionally one-time purchase business.
4. Manufacturing Efficiency and Quality Focus
Transitioning to pod-based assembly and onshoring production has reduced labor requirements and improved first-pass yield, supporting margin expansion and quality. The company is now able to flex production in real time, having scaled back from a pre-launch peak of 24,000 units per month to a steady 15,000 units, aligning inventory with demand to free up cash.
5. Marketing Leverage Through Influencers and AI
Celebrity endorsement and AI-driven content production are amplifying Berna’s brand presence. High-profile influencers like Tucker Carlson and innovative, low-cost ad campaigns (e.g., the “banana” commercial) are driving earned media and high return on ad spend (ROAS), while also circumventing platform restrictions on weapons advertising.
Key Considerations
This quarter marks an inflection point in Berna’s go-to-market strategy, as brick-and-mortar and dealer channels take precedence over DTC, and recurring revenue models begin to take shape. Investors should weigh the following:
- Dealer Channel Momentum: Success with Sportsman’s Warehouse and new chains like Big Five and Dunham’s Sports signals broader retail acceptance and potential for sustained volume growth.
- Inventory Normalization: Inventory built for the CL launch will be drawn down, improving cash flow and reducing working capital intensity in the second half.
- Recurring Revenue Potential: BurnaCare and future smart launcher features could meaningfully diversify revenue and increase customer lifetime value, but require execution and adoption.
- Consumer Sentiment Sensitivity: Underlying softness is visible in higher cart abandonment and price sensitivity, particularly at the higher end of the product range.
- Operational Leverage: Manufacturing efficiency gains and margin-accretive product mix provide a buffer against rising OpEx and macro headwinds.
Risks
Berna faces several risks, including macro-driven retail softness, price sensitivity among consumers, and the need to balance inventory against fluctuating demand. Execution risk remains around scaling new retail partnerships, recurring revenue adoption, and the effectiveness of influencer-led marketing. Regulatory uncertainty and tariffs, especially as discussed in media appearances, could also impact profitability or supply chain stability.
Forward Outlook
For Q3, Berna management expects:
- Seasonally slower sales, but continued double-digit growth, with a targeted annual growth range of 25% to 40%.
- Normalization of inventory and improved cash position as production aligns with steady-state demand.
For full-year 2025, management reaffirmed:
- Effective tax rate of approximately 23% as the company transitions to full taxpayer status.
- Continued focus on expanding retail footprint, launching new CL variants, and scaling recurring revenue initiatives.
Management highlighted:
- Brick-and-mortar expansion and new product launches as key growth drivers, even amid a softer consumer environment.
- Ongoing marketing investment and operational improvements to support profitability and market share gains.
Takeaways
Berna’s Q2 signals a decisive pivot toward channel diversification, operational efficiency, and future-proofing through recurring revenue.
- Dealer and Chain Store Growth: The Sportsman’s Warehouse rollout and new retail partnerships are now the primary engines of expansion, with brick-and-mortar outpacing DTC growth for the foreseeable future.
- Margin and Cash Flow Resilience: Higher-margin products, manufacturing efficiency, and inventory normalization underpin profit stability despite rising OpEx and macro headwinds.
- Subscription and Connectivity Upside: Early steps toward recurring revenue and smart device integration could unlock new value streams, but require careful execution and market adoption monitoring.
Conclusion
Berna’s Q2 results showcase a business rapidly maturing beyond its DTC roots, leveraging channel partnerships and product innovation to sustain growth in a challenging retail landscape. The next phase will test the scalability of recurring revenue models and the durability of brick-and-mortar momentum as competition and economic uncertainty persist.
Industry Read-Through
Berna’s pivot to brick-and-mortar and channel diversification reflects a broader trend among consumer safety and firearms-adjacent brands seeking resilience against digital acquisition cost inflation and online platform restrictions. The embrace of recurring revenue and connected device features signals a convergence with smart home and IoT security markets, while influencer-driven marketing and AI content production may become best practices for brands navigating regulatory and advertising headwinds. Retailers and brands in adjacent categories should monitor Berna’s execution as a potential playbook for omnichannel expansion and margin defense.