Byrna Technologies (BYRN) Q3 2026 earnings review
Byrna cut production costs, but sales fell by almost half
Byrna, the maker of less-lethal self-defense launchers, sold far less than a year ago and lost money. Sales fell 46% to $15.3 million as online shoppers bought less and store chains reordered slowly. A one-time $2.3 million tariff refund lifted the reported margin. Chief executive Conn Davis expects a better holiday quarter but gave no figures.
| Sales | $15.3M −46% from a year ago |
|---|---|
| Gross margin, excluding the tariff refund | 64.5% 60.1% a year ago |
| Cash and marketable securities | $9.4M $10.4M three months earlier |
| Outlook for the holiday quarter | No figures company expects results to improve from this quarter |
⚖️ Verdict: 🔴 Bearish
The story got worse because Byrna lost more money before one-offs and its cash fell. By our math, the loss excluding one-offs and tariff refunds more than doubled from last quarter. The good news: production costs fell after Byrna stopped making its own ammunition, so the margin without the refund rose more than 4 percentage points.
The question now is whether buyers return for the holidays or the earlier boom already reached most of them. If they return, new marketing turns visits into orders and inventory into cash; if not, costs stay above sales. Fourth-quarter sales and cash will tell.
🐂 Bull Case
Production Costs Fell After the Ammunition Plant Closed
Byrna stopped making its own ammunition, the projectiles its launchers fire, last quarter and now buys them from a contract manufacturer. The company said the switch improved ammunition margins "by approximately 1,200 basis points in the quarter", or 12 percentage points.
- Cost of making the products, excluding the tariff refund: 35.5% of sales, down from 39.9% a year ago
- Lower freight and purchase costs: about 2.6 percentage points of the gain
- Lower labor and factory overhead: about 1.9 percentage points
This matters because the gain came from costs, not from the one-time refund. A larger share of online sales added only about half a point, Byrna wrote in its quarterly filing, so most of the gain can last.
What to watch: gross margin excluding one-offs in the holiday quarter, the first busy season since the plant closed. A reading near 64% would show that the lower cost base holds at higher volume.
Positives this quarter didn't test
Four parts of the recovery plan got no new numbers in these results. Each one rests on evidence Byrna gave in earlier quarters, at small scale.
- Product quiz on the website: no update on how many quiz takers go on to buy; a rate that stays near twice the site average would support the plan.
- Paid two-week launcher trial: no figure at the larger scale Byrna planned; a purchase rate near the earlier 30% would support it.
- Dedicated store displays: no sales-per-store figure; dealer orders in the holiday quarter will show whether displays lift demand.
- Hero, the lower-priced product line bought in August: no sales figure yet; its first full quarter of sales will give the first reading.
🐻 Bear Case
Website Traffic Is Still Far Below Last Year
Byrna sells most of its launchers, handheld gas-powered devices that fire pepper and impact projectiles, online. Its website "averaged over 29,000 website sessions per day in August, the highest since March of this year", chief executive Conn Davis said. He added that "the initial indicators are encouraging".
A year earlier the picture was very different, so the August figure shows a low base, not a recovery. By our math, traffic is about 44% below August 2025.
- August website traffic: over 29,000 sessions a day, against about 52,000 a year earlier
- Website and Amazon sales: $10.0 million, down 39% from a year ago
- Launchers sold in the first nine months: down about 28%
This matters because Byrna spent more on advertising and reached fewer buyers. Advertising cost $5.2 million, up from $4.0 million a year ago. The company blamed a lower share of visitors who buy, on both its website and Amazon. That pattern fits a smaller pool of buyers as well as it fits weak marketing, and one quarter cannot separate the two.
What to watch: the share of website visitors who buy, which the release did not quantify, and direct sales in the holiday quarter. Direct sales that grow faster than advertising would mean the new marketing reaches new buyers.
Dealers and Store Chains Cut Their Orders
Byrna also sells through independent dealers and national store chains, about 1,500 locations at its last count. Those stores stocked up early in the year, and the company said reorders slowed "following substantial restocking in fiscal Q1 and slower-than-expected sell-through".
Sales to US dealers and chains fell 55% to $3.5 million. Last year's quarter included about $3.2 million of chain shipments that did not repeat, Byrna wrote in its filing. Even without those shipments, dealer sales fell about 24% by our math. Foreign distributors bought $0.5 million, down from $2.5 million.
What to watch: dealer and chain sales in the holiday quarter, when stores prepare for their busiest season. A second weak holiday would mean the store network built last year sells far less than its size suggests.
Costs Equal Sales and Cash Is Shrinking
Byrna's sales fell by almost half, but its running costs rose. Operating expenses, which cover advertising, staff and overhead, grew 7% to $15.1 million. They now equal 98.6% of sales. A year ago the figure was 49.9%.
- Loss before interest, tax, depreciation and one-offs: $1.4 million as reported
- The same loss without the tariff refund and a lease gain: about $3.8 million, the company said
- Cash and marketable securities: $9.4 million, down from $10.4 million three months earlier
- Added charges for unpaid customer bills: $1.7 million, including royalties owed by its Latin American licensee
This matters because cash fell in a quarter that included the $2.3 million refund and a sharp cut in purchasing. Byrna has a $5 million credit line, which is "not currently anticipated to be drawn". Its filing says it is weighing "a potential asset-based credit facility" and may sell new shares.
What to watch: cash at the end of November, after the holiday season. Chief executive Conn Davis expects "more substantial inventory sell through, leading to improved cash generation and overall results". A balance below the current one would mean the business cannot fund itself at this size.
Risks this quarter didn't answer
Four standing concerns got no clear answer in the press release or the quarterly filing, and each one waits for a later reading.
- New brand campaign: it reaches a wider audience only from the holiday season; holiday-quarter direct sales will show whether that audience buys.
- Sales from store shelves: Byrna still publishes no figure for how fast products leave dealer shelves; any such figure would move the case.
- Further write-downs: Byrna tests goodwill in the fourth quarter and warned that continued losses could force a reserve against $6.9 million of tax assets.
- Leadership: two senior vice presidents and two directors joined; the filings name no successor to the president who left in June.
👓 Other Themes
Byrna Completed Its Purchase of Hero
Byrna closed its purchase of Hero Defense Systems, a seller of less-lethal defense products, on August 6. The deal extends the range "into additional price points and form factors", the company said. Total consideration was $1.7 million in cash, shares and future royalties. Hero's results since closing "were not material", and the filing mentions a "planned product relaunch in fiscal 2027".
Byrna Halted Some Pepper Spray Sales
In September Byrna found that its supplier makes certain Fox Labs pepper sprays with trichloroethylene, a solvent that a US environmental rule bans in consumer products. The company stopped shipments, told dealers to stop sales and reported the matter to the Environmental Protection Agency on October 6. These sprays made up about 1.3% of nine-month sales. Byrna cannot yet estimate penalties or reformulation costs.
New Executives Arrived and the Buyback Expired
Jim White joined to lead retail and channel growth, and Nate Secor joined to lead brand and marketing. Rose Lopez Keravuori and Matthew McBrady joined the board. The $10 million share buyback program expired on July 31 with $5.8 million spent, and Byrna bought no shares this quarter. Severance and leadership-transition costs were $0.5 million.
💲 Other KPIs
Inventory fell 1.5% from the previous quarter. Finished goods now make up half of it, up from 29% in November, because products sold more slowly. Byrna counted about 292 days of inventory for the nine months. A year earlier the figure was 228.
Money owed by customers fell from $10.8 million in November as Byrna collected holiday-season bills and shipped less to stores. That collection supported cash this year, and the company does not expect it to repeat at a similar size. Three customers owe about 42% of the balance.
The share count rose 1.3% from a year ago. Byrna issued 104,000 shares to pay for part of the Hero purchase and bought none back. About 1.55 million options and stock units sit outside the count because the company made a loss.
🔮 Guidance
Unchanged. Chief executive Conn Davis expects results "to improve sequentially as we approach the end of our fiscal year", and he gave no figures. The holiday quarter is the seasonally strongest. Last year it brought $35.2 million of sales, so even a large step up from $15.3 million can leave sales well below a year ago.
Unchanged. Byrna expects inventory "to continue normalizing in subsequent quarters and more substantially during the upcoming holiday sales period". Last quarter management targeted a $5 million cut in the second half. Inventory fell $0.5 million in the first three months of that period, so by our math about $4.5 million remains for the holiday quarter.
Unchanged. Davis expects inventory sales to lead "to improved cash generation and overall results". Three months ago management said cash would end the year above $10.4 million. It now stands at $9.4 million, so by our math the earlier aim needs more than $1.0 million from the holiday quarter. The filing's cash projections assume no further tariff refunds.
❓ Key Questions
What share of website visitors bought this quarter?
Last quarter Byrna put the rate at 0.59%, down from 1% a year earlier. The release says only that it improved from June to August. The actual rate shows whether the new marketing works.
Did the delayed Academy Sports shipment arrive?
Byrna targeted 200 to 250 Academy stores by year-end and said a first large order moved into this quarter. Wholesale sales still fell 26% from the previous quarter, and the release does not mention Academy.
What replaced the free cash flow target?
Early this year management pointed to free cash flow in the mid-teens of millions of dollars for fiscal 2026. The business used $3.5 million of operating cash in nine months, and no new target exists.
How much room do the loan conditions leave?
The bank tests two financial ratios every quarter, even with nothing borrowed. Byrna passed at the end of August. With losses continuing, investors need to know what profit level keeps the $5 million credit line open.
How much does Hero sell in a year?
Byrna will pay Hero's former owners 3.5% of sales of certain products, up to $5 million. It has given no sales figure for the business, so readers cannot size the deal's contribution.