Johnson Outdoors posts record-high earnings in Q3 2017
Johnson Outdoors Inc. reported double-digit growth in sales and operating profit for the third quarter of 2017, with double-digit growth in the company’s fishing brands driving sales to $104 million for an 18 percent increase in segment revenue.
Higher volumes in fishing, stronger performance in diving and improved margins in all units were key drivers in the improvement in operating profit.
Strong marketplace performance of new products across the company’s Minn Kota, Humminbird and Cannon brands generated higher year-to-date sales for the nine-month period of $398.8 million, an 11 percent increase compared with the same prior year period.
Total company operating profit was $45.7 million versus operating profit of $27.8 million in the same nine-month period last year.
Strong demand for new products drove significantly higher volume leading to a nearly three-fold increase in net income quarter-over-quarter.
During the current fiscal nine-month period, total company net income more than doubled as revenues surged 11 percent above the same prior year fiscal nine months.
“This quarter’s outstanding results emphasize the importance of our continued focus and investment on delivering market-winning innovation driven by a deeper understanding of, and unique insights into outdoor recreation consumers,” said Chairman and Chief Executive Officer Helen Johnson-Leipold. “New products and technologies are powering tremendous growth in fishing.”
The company’s Predator series of fishing boats from Old Town have helped Johnson Outdoors grow share in very challenging watercraft recreation markets, Johnson-Leipold said.
“Overall, we are well-positioned to end the year strong with solid momentum heading into the next fiscal year. Looking ahead, we expect to see fishing grow at a more normalized rate,” she said.
Third quarter results reflect in-season replenishment orders for the company’s warm-weather outdoor recreation products.
Favorable marketplace response to new products energized an 11 percent increase in total company net sales of $155.3 million compared to $139.3 million in the previous year third quarter.
Diving sales increased 17 percent driven by strong positive momentum behind new buoyancy compensator and dive computer innovations.
A sluggish kayak market led to lower sales quarter-over-quarter in watercraft recreation, masking share growth in the company’s core brands.
Total company operating profit during the quarter was $24.7 million compared to $13.6 million in the prior fiscal-year third quarter. Gross margin increased by 290 basis points driven by a favorable product mix and sales volume related operating efficiencies.
Higher volume-related expenses, higher incentive compensation expense and higher administrative and legal expenses in the current year quarter were nearly offset by the impact of a $6.2 million goodwill impairment charge recognized during the third quarter of fiscal 2016. Third quarter net income was $16.6 million, or $1.65 per diluted share, compared to net income of $6.8 million, or $0.68 per diluted share, in the previous third quarter.
“Across the board, price-to-value innovation and increased efficiencies have expanded gross margins and driven enhanced bottom-line performance,” said Vice President and Chief Financial Officer David W. Johnson. “The balance sheet is strong and our healthy cash position enables us to continue to invest in future growth strategies and platforms while continuing to pay cash dividends to our investors.”
