Key Highlights

● Second-quarter net sales rose 0.6% to US$295.6 million, with same-store sales flat.

● The net loss narrowed to US$4.4 million, or US$0.11 per diluted share.

● Inventory fell about 10% to US$399.0 million.

● Net debt was US$167.0 million, about US$26 million lower than a year earlier.

Sportsman's Warehouse Holdings Inc (NASDAQ:SPWH), the outdoor and hunting retailer, is worth following because its latest results show a turnaround being driven by cleaner inventory and lower borrowing rather than by sales growth. The second-quarter report, issued on September 1, 2026, arrives just before the fall hunting season that matters most to the business.

The company sells hunting, shooting, fishing and camping equipment through its stores and online channels, and says it has no new store openings planned for 2026. The first-quarter release also highlighted e-commerce growth of more than 6% and ongoing website enhancements, so the digital channel is part of the plan alongside the store base.

The second quarter

For the 13 weeks ended August 1, 2026, net sales were US$295.6 million, up 0.6% from US$293.9 million. Same-store sales were flat. Hunting and shooting sports rose 6.7%, while other categories declined.

Gross margin improved to 32.5% from 32.0%, helped by lower freight and a one-time tariff benefit. Selling, general and administrative expenses were US$97.1 million, or 32.9% of sales, roughly flat on the year.

The net loss narrowed to US$4.4 million, or US$0.11 per diluted share, from US$7.1 million, or US$0.18 per share. The adjusted net loss was US$3.1 million, and adjusted EBITDA was US$8.7 million against US$8.3 million. Because the gross margin gain included a one-off tariff benefit, the underlying improvement is smaller than the headline suggests. The hunting and shooting gains were driven by firearms and ammunition.

Inventory, debt and liquidity

Inventory was US$399.0 million, down US$44.5 million, or about 10%, from a year earlier. Chief executive Paul Stone said the company enters the fall and holiday seasons with its healthiest inventory position in years.

Net debt was US$167.0 million, about US$26 million lower than a year earlier. The revolver balance was US$125.1 million and the term loan US$43.9 million, with cash of US$2.0 million. Total liquidity was US$105.0 million.

Chief financial officer Jennifer Fall Jung said the company made meaningful progress in the quarter, with sales essentially flat and a 50 basis point gross margin improvement. Mr. Stone also described a challenging consumer environment in which customers are selective about discretionary spending.

Net debt did rise from the first quarter. In the quarter ended May 2, 2026, net debt was US$148.4 million and liquidity US$116.7 million, which fits the usual seasonal build of stock ahead of fall.

Guidance and the first half

Management reaffirmed its 2026 guidance: same-store sales between a decline of 1.0% and growth of 2.0%, adjusted EBITDA of US$30 million to US$36 million, and capital expenditure of US$20 million to US$25 million.

That target looks demanding against the first half. For the 26 weeks, net sales were US$551.7 million, up 1.6%, but the net loss was US$26.3 million and adjusted EBITDA only US$0.6 million. The company would need a strong second half to reach even the lower end of its range, since the retail calendar is weighted toward fall and the holidays.

The first quarter showed the same pattern: net sales of US$256.1 million, a net loss of US$21.8 million and adjusted EBITDA of negative US$8.1 million, reported on June 2, 2026.

Risks and what to watch

The release itself notes that significant work remains. Cash is thin, borrowing costs are a drag, and sales are growing only marginally. Management cited a turnaround, including transition costs and an executive retention bonus, according to the first-quarter release.

Seasonal Build and the Second-Half Ask

Sportsman's Warehouse narrowed its second-quarter net loss to US$4.4 million, or US$0.11 per diluted share, with inventory down about 10% to US$399.0 million and net debt about US$26 million lower at US$167.0 million. Management reaffirmed 2026 guidance of adjusted EBITDA of US$30 million to US$36 million, although the first half produced adjusted EBITDA of only US$0.6 million.

The third-quarter results, progress of free cash flow toward further debt reduction and whether hunting categories sustain their momentum are the next points to follow, with the company guiding to capital expenditure of US$20 million to US$25 million for the year.