Byrna Technologies Inc. Q2 FY26 Results

Our second quarter results did not reflect the level of performance we believe Byrna can deliver. We expected the quarter to begin a transition period, but continued softness in our direct-to-consumer channel as well as a slower pace of reorders across retail partners led to a steeper reset than we initially expected. In e-commerce, web traffic remained weak, and while conversion rates showed modest improvement as a result of our website changes, overall conversion levels and average order value were below where we expected. In retail, our partners entered the quarter with elevated inventory levels following meaningful post-holiday restocking in Q1. Sell-through during the quarter did not occur at a pace that supported consistent reorder activity, which impacted revenue across both dealer and big box channels. From an operational standpoint, we took actions during the quarter to better align production and operating costs with current demand. We reduced production capacity in our launcher facility and exited in-house ammo manufacturing where we were not cost competitive. These actions reduce costs, operating complexity, and establish a more balanced operating baseline that should allow us to work down physical inventory through the second half of the year. We also advanced a number of initiatives designed to improve demand over both the near and longer term. Our top operational priority is improving customer conversion and retail productivity across all channels. We are seeing encouraging early results from our “try before you buy” program, which is attracting new customers to the brand and generating conversion rates of approximately 30%. This represents a meaningful improvement versus traditional e-commerce and provides a scalable pathway to reaccelerate direct-to-consumer growth over time. On the retail side, we are focused on continuing our store expansion while also working closely with our partners to improve customer discovery and sell-through. Initiatives such as in-store training, enhanced merchandising, including end-cap displays, and expanded demo experiences are producing stronger results in the locations where they have been implemented. Our focus now is applying those learnings more consistently across the wider footprint. In parallel, our messaging pivot is underway, as we work to broaden our reach and engage a wider set of customer segments. This includes partnerships such as Fox Sports, along with new social and influencer programs designed to introduce Byrna to previously underpenetrated audiences while continuing to build on the existing foundation with our core customers. We believe this approach will expand our addressable market while supporting more consistent and durable demand over time. We are also in the process of bringing on experienced leaders across marketing and retail to strengthen execution, improve accountability and support the next phase of growth. Based on current expectations, fiscal 2026 will not be a revenue-growth year. Q2 reset the revenue baseline, and we are planning the business around current demand trends rather than assuming a quick return to prior growth rates. We expect improvement from the first half of the fiscal year to the second half, as retailers prepare for the holidays and more of our marketing, conversion and customer-acquisition initiatives enter the market. We are building from a more realistic baseline, with the opportunity to improve as these initiatives begin to contribute. Our focus is on improving website traffic and conversion, strengthening retail sell-through and reorder cadence, reducing inventory and improving working capital efficiency. We believe the actions underway position Byrna to finish fiscal 2026 on stronger footing and enter fiscal 2027 with a business capable of delivering more consistent growth.