Solo Brands CEO attributes strong Q3 to omnichannel approach
Solo Brands (DTC) posted third-quarter earnings showing a strong increase in net income, rising 176% compared to the same period last year. The lifestyle brands company stands firm on its 2023 guidance, expecting net revenue to reach between $520 to $540 million. Solo Brands CEO John Merris joins Yahoo Finance to discuss the omnichannel approach the business is using for strong success.
"We wanted to start exploring ways that we can leverage retail partnerships to help us drive more traffic and exposure to our brands. We have executed on that strategy and seen tremendous success in a tough year in retail," Merris explains. "We are seeing tremendous growth, we expected some cannibalization of our direct-to-consumer business, our e-commerce business and we have seen that but not in excess of what we expected."
Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.
Video Transcript
RACHELLE AKUFFO: So John, talk about this omnichannel approach, because when you look at direct-to-consumer revenue, it did fall 11.6% versus the same quarter last year. But wholesale revenue, that's up 114% versus Q3 of last year. Talk about the strategies that you're using there as you continue to expand in digitally connected commerce.
JOHN MERRIS: Yeah. We said at the beginning of this year that we wanted to start exploring ways that we could leverage retail partnerships to help us drive more traffic and exposure to our brands. We have executed on that strategy and seen tremendous success in a tough year in retail. We're seeing tremendous growth.
We expected some cannibalization of our direct-to-consumer business, our e-commerce business. And we have seen that, but not in excess of what we expected. Actually, potentially slightly less. And so, overall, we're very happy with these partnerships.
Dick's Sporting Goods, Ace Hardware, Costco have all been great partners to us this year amongst many others. And that has offset some of that headwind. I think one of the highlights I'll call out to our Q3 results is while we delivered 8% growth year-over-year, we delivered 33% EBITDA growth year-over-year. So we are seeing better profitability, as we've made this transition to more balance between our direct-to-consumer and our retail business.
RACHELLE AKUFFO: And you mentioned some companies there. I know you've continued to invest in brand awareness, retail partnerships, most recently Target. Talk about that decision, because some of your other partnerships-- when you think Dick's Sporting Goods, REI, Public Land Shields, these are all for your outdoorsy sporty person, whereas Target's a much broader consumer base there. So why Target? What's the appeal there?
JOHN MERRIS: Yeah, we've been working really hard for the last year at innovating around ways to get our products to be more accessible to everyday consumers, and also different demographics. We're really excited about the Target partnership. Our Mesa tabletop fire pit is super easy to use. It allows you to do a very kind of non-invasive s'more type experience.
You only need 25, 30 minutes. You can even do it on a school night. But that tabletop unit is easy for anybody to use.
You can start a fire. We say box to burn in five minutes. And then, be making s'mores with the kids, or with friends and family, on your tabletop.
So that's the product that's going into Target. We think that it opens up a completely new demographic to us. And we're excited to see how that does this holiday season.
