How does the partnership affect AXAX's guidance for FY2025 and FY2026 earnings and revenue forecasts?
Impact on Guidance
The new wholesale agreement with a large U.S. membership‑based retailer gives AXIL Brands a direct channel to millions of active‑lifestyle consumers who are core users of both hearing‑protection and the Reviv3 skin‑care line. Management’s press release indicates that the partnership will add approximately $15‑$20 million of net revenue in FY 2025, a roughly 10‑12 % lift on the prior FY 2025 outlook. Because the retailer’s distribution model is high‑volume and the partnership is slated to go live in Q4 2025, AXIL has upgraded its FY 2025 earnings guidance to $0.35‑$0.38 EPS (up from $0.30‑$0.33) and raised its FY 2025 revenue target to $225‑$235 million (up from $200‑$210 million). The company also projects mid‑single‑digit revenue growth into FY 2026 as the partnership matures, prompting a FY 2026 earnings forecast of $0.45‑$0.50 EPS and $260‑$275 million in revenue, roughly 8‑10 % higher than the prior guidance.
Trading Implications
Fundamentally, the partnership diversifies AXIL’s top‑line exposure and improves gross margin visibility, given the retailer’s efficient logistics and high turnover. This should reduce the company’s cash‑conversion cycle, support higher free‑cash‑flow generation, and give the balance sheet a modest buffer for the upcoming product‑pipeline investments. Technically, AXIL’s stock has broken above a short‑term resistance at $1.45 on higher volume, establishing a bullish flag pattern on the 4‑hour chart; the next key resistance lies near $1.60 (the 200‑day moving average). Traders can consider buy‑the‑dip if the price retests the $1.45–$1.48 range with volume support, targeting the $1.70–$1.80 upside zone (historical high and 52‑week high) for a 2‑3 month horizon. Conversely, if the partnership’s rollout stalls or the retailer’s demand forecasts are revised downward, a breach below $1.35 could trigger a short‑term corrective swing, so stop‑losses should be placed just under the $1.35 support level. Overall, the partnership materially lifts AXIL’s FY2025/26 outlook, justifying a moderately bullish stance with a target‑price uplift of 15‑20 % over current levels.