Escalade (NASDAQ:ESCA) reported higher second-quarter sales and profitability for 2026, aided by new product demand, contributions from its Gold Tip archery acquisition and a recovery of tariffs paid in prior periods.
For the three months ended June 30, Escalade posted net income of $9.4 million, or $0.68 per diluted share, on net sales of $57.7 million. Sales rose 6% from the year-earlier period, President and CEO Patrick Griffin said.
Margins Expand as Tariff Recoveries Lift Profit
Gross margin rose to 26.2% from 24.7% a year earlier, an increase of about 146 basis points. Chief Financial Officer Stephen Wawrin said the improvement primarily reflected lower operational costs through better fixed-cost absorption, operating leverage and a favorable sales mix. The Gold Tip business also contributed to the mix benefit.
Second-quarter EBITDA increased to $13.2 million from $3.9 million in the prior-year quarter. The result included approximately $9.9 million in recoveries of tariffs paid in earlier periods, which the company recorded as a benefit to operating profit.
Griffin said Escalade intends to use the tariff refunds to help offset higher freight costs, commodity prices and announced or potential tariffs. The company also plans to direct part of the recovery toward consumer and trade promotions, product innovation and capital improvements at its facilities.
Selling, general and administrative expenses totaled $12.5 million, up $2.2 million from the prior-year period. Wawrin said the increase was largely tied to costs associated with the All-Cornhole and Gold Tip businesses acquired in late 2025, as well as higher variable compensation.
Pricing and Promotions
During the question-and-answer session, Griffin said Escalade does not expect to change its pricing in the near term despite increased freight rates and commodity inflation.
“We feel like our pricing is pretty good right now,” Griffin said. He added that the company hopes elevated freight costs will prove transitory as geopolitical conditions improve.
Rather than raising prices, Escalade plans to absorb some additional freight expenses with the tariff refund while continuing, and potentially increasing, promotions during the third and fourth quarters, according to Griffin.
New Products and Market-Share Efforts
Escalade highlighted several product launches across its portfolio during the quarter. ONIX Pickleball introduced the Hype Lite paddle, a lighter-weight version of its earlier Hype launch, and the Adapt MAX paddle, which features MAXRev technology, a raw carbon-fiber surface and a carbon-fiber power frame.
In basketball, the company launched the Goalrilla Hydro Dunk pool hoop, a corrosion-resistant system designed for salt- and chlorine-safe pool use. Escalade also introduced the Lucasi Halo carbon-fiber billiards shaft, which is engineered to provide low deflection performance and more consistent cue-ball control.
Griffin told analysts that Escalade is seeing particular market-share traction in Bear Archery’s Trophy Ridge accessories business. The company launched new sights, releases and stabilizers at the ATA show earlier this year, and Griffin said those products have been “accepted well into the market.”
He also cited new placements for canopy weights and plastic chain in Escalade’s safety business as contributors to growth in that category.
Inventory, Cash Flow and Balance Sheet
Escalade said it continued to improve asset utilization during the quarter. Total inventory declined by $1.5 million from a year earlier despite the added inventory from two acquisitions completed in the second half of 2025. The company expects inventory to decline further in the second half as it works toward a longer-term target of roughly three times inventory turns.
Operating cash flow was $8.7 million in the second quarter, compared with $13.3 million a year earlier. Wawrin said the decline primarily reflected increased cash used for working capital.
As of June 30, Escalade had $16.4 million in cash and cash equivalents and $14.9 million in total debt, all current at quarter-end. Griffin said the company repaid nearly $1.8 million of long-term debt during the quarter and increased its cash balance by $3.3 million from the end of the first quarter, moving the company to a net cash position.
Looking ahead, management said it remains mindful of inflation, energy costs and broader consumer-spending pressure. However, Griffin said planned product launches, the company’s operating leverage and continued execution should support profitable growth. Escalade also said it is evaluating a growing pipeline of strategic, accretive acquisition opportunities that could strengthen its existing platforms and expand its presence in attractive categories.
About Escalade (NASDAQ:ESCA)
Escalade, Inc is a U.S.-based manufacturer and distributor of recreational equipment and specialty products for both consumer and commercial markets. Headquartered in Evansville, Indiana, the company operates through two principal business segments: Sporting Goods and Commercial Products. The Sporting Goods segment encompasses a diverse range of products such as hockey and lacrosse goal assemblies, fitness accessories, archery and hunting gear, and table tennis equipment. The Commercial Products segment focuses on seating solutions for restaurants, hospitality venues and other public spaces under the Top Seat brand, as well as storage, display products and industrial carts.
Within Sporting Goods, Escalade markets its products under proprietary brands including Bear® Archery, Gene St.
