Johnson Outdoors Reports Fiscal First Quarter Results
- None.
- Lower sales and decreased earnings for the first fiscal quarter
- Total Company net sales declined 22 percent to $138.6 million
- Camping revenue declined 49 percent
- Watercraft Recreation revenue declined 50 percent
- Operating profit was approximately $0.05 million
- Net income was $4.0 million, or $0.38 per diluted share
Insights
The reported decrease in Johnson Outdoors Inc.'s sales and earnings for the first fiscal quarter is a significant indicator of the company's current financial health and market position. The 22 percent decline in net sales and the sharp drop in operating profit from $5.5 million to a marginal $0.05 million are key figures that stakeholders should consider. While the improved gross margin, from 35.2 to 38.1 percent, suggests some cost efficiency, it does not offset the revenue shortfall.
From an investment perspective, the company's debt-free balance sheet and increased cash reserves are positive signs, providing some cushion against market volatility and enabling continued dividend payments. However, the high inventory levels and lower consumer demand, especially in the fishing and watercraft recreation segments, might be a cause for concern regarding future revenue streams. The sale of a building contributing to the profit before income taxes is a one-off event and should not be considered a sustainable income source.
The outdoor recreation market is facing headwinds, as evidenced by Johnson Outdoors Inc.'s report. The 20 percent decline in fishing sales and 50 percent decrease in watercraft recreation revenue reflect a significant contraction in consumer spending within these categories. The company's strategic focus on innovation and marketing to navigate these challenges is crucial, but the effectiveness of these measures will only be proven over time.
It is also important to note the impact of foreign currency translation, which affected diving sales. This highlights the importance of currency risk management in multinational operations. Additionally, the sale of the Military and Commercial tents business explains part of the revenue decline in the camping segment. This divestiture may streamline the company's focus but also reflects a retreat from certain market segments.
The broader economic context can shed light on Johnson Outdoors Inc.'s performance challenges. High retail inventory levels suggest a supply-demand imbalance, likely exacerbated by broader economic slowdowns affecting consumer discretionary spending. This situation may persist and companies like Johnson Outdoors Inc. must adapt to prolonged periods of reduced consumer demand.
The effective tax rate increase from 28.0 to 33.0 percent also has implications for net income. While taxes are a complex issue influenced by numerous factors, including policy changes and profitability, an increased tax rate can further strain the net earnings of a company already facing revenue pressures.
RACINE, Wis., Feb. 02, 2024 (GLOBE NEWSWIRE) -- Johnson Outdoors Inc. (Nasdaq:JOUT), a leading global innovator of outdoor recreation equipment and technology, today announced lower sales and decreased earnings results for the Company’s first fiscal quarter ending December 29, 2023.
“We’re facing a tough marketplace with high inventory levels at retail and lower consumer demand resulting in soft first quarter sales. We are taking steps to outperform the challenging marketplace and improve our financial results,” said Helen Johnson-Leipold, Chairman and Chief Executive Officer. “Looking ahead, our focus remains consistent on investing in innovation and marketing to position our brands for success.”
FIRST QUARTER RESULTS
Total Company net sales in the first quarter declined 22 percent to
- Fishing sales declined by approximately 20 percent driven by high retail inventories and lower consumer demand
- Diving sales decreased 8 percent over the prior year quarter, mainly due to a 6 percent negative impact on sales due to foreign currency translation
- Camping revenue declined 49 percent, of which approximately half was due to the sale of the Military and Commercial tents business last year. The remainder was due to high retail inventories and a decline in consumer spending
- Watercraft Recreation revenue declined 50 percent, reflecting continued significant reductions in the overall market demand
Total Company operating profit was approximately
Profit before income taxes was
Net income was
OTHER FINANCIAL INFORMATION
The Company reported cash and investments of
“We remain focused on managing our high inventory levels, executing on our defined cost savings program, and managing our expenses to improve profitability,” said David W. Johnson, Vice President and Chief Financial Officer. “Importantly, our debt-free balance sheet and cash position enable us to continue investing in strategic opportunities to strengthen the business, while consistently paying dividends to shareholders.”
WEBCAST
The Company will host a conference call and audio web cast at 11:00 a.m. Eastern Time on Friday, February 2, 2024. A live listen-only web cast of the conference call may be accessed at Johnson Outdoors’ home page or here. A replay of the call will be available for 30 days on the Internet.
About Johnson Outdoors Inc.
JOHNSON OUTDOORS is a leading global innovator of outdoor recreation equipment and technologies that inspire more people to experience the awe of the great outdoors. The company designs, manufactures and markets a portfolio of winning, consumer-preferred brands across four categories: Watercraft Recreation, Fishing, Diving and Camping. Johnson Outdoors' iconic brands include: Old Town® canoes and kayaks; Ocean Kayak™; Carlisle® paddles; Minn Kota® fishing motors, batteries and anchors; Cannon® downriggers; Humminbird® marine electronics and charts; SCUBAPRO® dive equipment; Jetboil® outdoor cooking systems; and, Eureka!®camping and hiking equipment.
Visit Johnson Outdoors at http://www.johnsonoutdoors.com
Safe Harbor Statement
Certain matters discussed in this press release are “forward-looking statements,” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical fact are considered forward-looking statements. These statements may be identified by the use of forward-looking words or phrases such as "anticipate,'' "believe,'' "confident," "could,'' "expect,'' "intend,'' "may,'' "planned,'' "potential,'' "should,'' "will,'' "would'' or the negative of those terms or other words of similar meaning. Such forward-looking statements are subject to certain risks and uncertainties, which could cause actual results or outcomes to differ materially from those currently anticipated. Factors that could affect actual results or outcomes include the matters described under the caption “Risk Factors” in Item 1A of the Company’s Form 10-K filed with the Securities and Exchange Commission on December 8, 2023, and the following: changes in economic conditions, consumer confidence levels and discretionary spending patterns in key markets; uncertainties stemming from political instability (and its impact on the economies in jurisdictions where the Company has operations), uncertainties stemming from changes in U.S. trade policies, tariffs, and the reaction of other countries to such changes; the global outbreaks of disease, such as the COVID-19 pandemic, which has affected, and may continue to affect, market and economic conditions, along with wide-ranging impacts on employees, customers and various aspects of our operations; the Company’s success in implementing its strategic plan, including its targeted sales growth platforms, innovation focus and its increasing digital presence; litigation costs related to actions of and disputes with third parties, including competitors; the Company’s continued success in its working capital management and cost-structure reductions; the Company’s success in integrating strategic acquisitions; the risk of future write-downs of goodwill or other long-lived assets; the ability of the Company’s customers to meet payment obligations; the impact of actions of the Company’s competitors with respect to product development or enhancement or the introduction of new products into the Company’s markets; movements in foreign currencies, interest rates or commodity costs; fluctuations in the prices of raw materials or the availability of raw materials or components used by the Company; any disruptions in the Company’s supply chain as a result of material fluctuations in the Company’s order volumes and requirements for raw materials and other components, or the demand for those same raw materials and components by third parties, necessary to manufacture and produce the Company’s products including related to shortages in procuring necessary raw materials and components to manufacture and produce such products; the success of the Company’s suppliers and customers and the impact of any consolidation in the industries of the Company’s suppliers and customers; the ability of the Company to deploy its capital successfully; unanticipated outcomes related to outsourcing certain manufacturing processes; unanticipated outcomes related to litigation matters; and adverse weather conditions. Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included herein are only made as of the date of this filing. The Company assumes no obligation, and disclaims any obligation, to update such forward-looking statements to reflect subsequent events or circumstances.
JOHNSON OUTDOORS INC.
| (thousands, except per share amounts) | ||||||
| THREE MONTHS ENDED | ||||||
| Operating results | December 29, 2023 | December 30, 2022 | ||||
| Net sales | $ | 138,644 | $ | 178,337 | ||
| Cost of sales | 85,790 | 115,558 | ||||
| Gross profit | 52,854 | 62,779 | ||||
| Operating expenses | 52,808 | 57,307 | ||||
| Operating profit: | 46 | 5,472 | ||||
| Interest income, net | (1,160 | ) | (790 | ) | ||
| Other income, net | (4,693 | ) | (1,904 | ) | ||
| Profit before income taxes | 5,899 | 8,166 | ||||
| Income tax expense | 1,944 | 2,287 | ||||
| Net income | $ | 3,955 | $ | 5,879 | ||
| Weighted average common shares outstanding - Dilutive | 10,220 | 10,168 | ||||
| Net income per common share - Diluted | $ | 0.38 | $ | 0.57 | ||
| Segment Results | ||||||
| Net sales: | ||||||
| Fishing | $ | 110,492 | $ | 138,041 | ||
| Camping | 5,913 | 11,613 | ||||
| Watercraft Recreation | 4,813 | 9,658 | ||||
| Diving | 17,478 | 19,059 | ||||
| Other / Eliminations | (52 | ) | (34 | ) | ||
| Total | $ | 138,644 | $ | 178,337 | ||
| Operating profit (loss): | ||||||
| Fishing | $ | 11,529 | $ | 15,572 | ||
| Camping | 358 | 753 | ||||
| Watercraft Recreation | (2,078 | ) | (415 | ) | ||
| Diving | (578 | ) | 13 | |||
| Other / Eliminations | (9,185 | ) | (10,451 | ) | ||
| Total | $ | 46 | $ | 5,472 | ||
| Balance Sheet Information (End of Period) | ||||||
| Cash, cash equivalents and short-term investments | $ | 109,555 | $ | 103,422 | ||
| Accounts receivable, net | 83,043 | 120,553 | ||||
| Inventories, net | 267,321 | 251,525 | ||||
| Total current assets | 476,224 | 486,524 | ||||
| Long-term investments | 4,668 | — | ||||
| Total assets | 692,683 | 689,096 | ||||
| Total current liabilities | 104,067 | 117,438 | ||||
| Total liabilities | 188,813 | 194,875 | ||||
| Shareholders’ equity | 503,870 | 494,221 | ||||
| Johnson Outdoors Inc. | ||
| David Johnson | Patricia Penman | |
| VP & Chief Financial Officer | VP – Marketing Services & Global Communications | |
| 262-631-6600 | 262-631-6600 | |
FAQ
What was Johnson Outdoors Inc.'s (JOUT) total Company net sales for the first fiscal quarter ending December 29, 2023?
What was the percentage decline in Camping revenue for JOUT in the first fiscal quarter?
What was the percentage decline in Watercraft Recreation revenue for JOUT in the first fiscal quarter?
What was JOUT's net income for the first fiscal quarter ending December 29, 2023?
What was JOUT's cash and investments as of December 29, 2023?
