What happened
Clarus Corporation (CLAR 2.44%) stock was beating the market on Tuesday, as shares rose 3% as of 2:30 p.m ET, compared to a 0.3% increase in the S&P 500. Shares had been up by over 10% just after the market opened but settled to more modest gains. The stock remains in negative territory for the year, down 23% since the start of 2022.
Investors sent shares higher after the sporting-apparel specialist announced strong sales growth in the Q2 period that ended in late June.
So what
Clarus revealed in an earnings report on Monday afternoon that Q2 revenue rose 57%. Most of that growth came from recent acquisitions like the Rhino-Rack and MaxTrax brands. But the core business expanded at a solid clip, too, up 16%. Executives highlighted strong demand trends in its outdoor and adventure-apparel segments, especially in key markets like the U.S., Australia, and New Zealand.
It wasn't all good news in this report, though. Clarus struggled with supply chain challenges, which pressured sales. The company also reported flat gross profit margin, compared to a year earlier, mainly because of rising freight costs. Clarus remained profitable, despite heavy investments in areas like acquisitions and marketing.
Now what
Executives affirmed their wider 2022 outlook that calls for sales to rise about 35% to $470 million. This forecast incorporates higher expectations in some categories, offset by lower sales in the adventure segment that has been hurt by supply chain issues.
Overall, the report showed solid demand and profitability trends, so it's no surprise that the stock rose in response to the Q2 update. There are big questions around how well consumer spending will hold up heading into the holiday shopping period. But so far, Clarus is earning its place as a high growth stock.
