Johnson Outdoors reports double-digit 3Q revenue, profit growth

Johnson Outdoors a reported double-digit growth in revenue and profits for the fiscal third quarter ending June 29, 2018.

Strong new product demand drove expanded margins leading to a robust increase in net income versus the prior year third quarter, said Chairman and Chief Executive Officer Helen Johnson-Leipold.

“Unprecedented growth in our flagship fishing brands throughout the year underscores the importance of our ongoing emphasis on consumer insight driven innovation. Delivering this same level of continuous new product success across our entire brand portfolio is a key priority, and we are working to further strengthen organizational capacity and capability to do so,” Johnson-Leipold said.

Future plans will focus on strategies targeted on fully leveraging Johnson Outdoors’ company-wide digital transformation, which will be backed by data analytics to enhance accelerated profitable growth for all channels over the long-term, Johnson-Leipold added.

Fiscal third quarter results reflect in-season replenishment orders for the company’s warm-weather outdoor recreation products.

Favorable marketplace momentum for new products, particularly in fishing and camping, fueled a 10 percent increase in total company net sales of $170.8 million compared to $155.7 million in the previous year quarter.

Foreign currency translation had a favorable 1 percent impact on net sales.

Key factors behind the year-over-year comparison in each business unit were:

• Continued high demand for new products introduced over the past 18 months powered growth in Minn Kota, Humminbird and Cannon brands across all key channels, generating sales of $121.9 million for a 17.3 percent increase in unit revenue;
• Camping sales outpaced prior year by 14.7 percent, driven largely by growth in Jetboil and Eureka brands in key consumer channels, bolstered by additional gains in military and commercial segments;
• Transition to a new distribution model in Japan over the past year led to the unfavorable year-over-year revenue comparison in diving;
• Kayak market weakness affecting all segments and channels continued to negatively impact watercraft recreation sales.

Total company operating profit during the quarter was $32 million, a 29 percent increase compared to $24.7 million in the prior year quarter.

Gross margin improved to 46.5 percent versus 45.5 percent in last year’s same quarter. Net income in the fiscal third quarter rose to $23.8 million, or $2.37 per diluted share, a 44 percent increase compared to $16.6 million, or $1.65 per diluted share, in the previous year third quarter.

Fiscal 2018 year-to-date net sales grew 13.6 percent to $453.1 million versus net sales of $398.8 million in the same fiscal nine-month period last year.

Total company operating profits rose to $65.0 million compared with $45.7 million during the prior fiscal year’s first nine-months. Exceptionally strong new product demand in Fishing and gross margin expansion were key drivers behind improved operating results.

Net income in the fiscal nine-month period surged 32 percent to $45.6 million, or $4.54 per diluted share, compared with $34.6 million, or $3.45 per diluted share, in the same nine-month period last year.

The year-to-date effective tax rate of 34.4 percent reflects $6.8 million in charges during the year resulting from changes in accounting for taxes prompted by new U.S. tax reform legislation.

“We are working hard to sustain positive momentum through the end of the fiscal and ensure our brands are well-positioned for a strong start next year. Looking ahead to 2019, we are in the process of determining the impact, and our mitigation plans, of recently announced U.S. tariffs and retributive sanctions in other countries,” said David W. Johnson, chief financial officer. “The balance sheet remains very strong and our growing cash position enables us to invest in strategic priorities and other opportunities to strengthen our brands and grow our businesses, while continuing to create value and consistently pay dividends to shareholders.”

The company will host a conference call and audio web cast at 10 a.m. Eastern Time today (Tuesday Aug. 7) to discuss third quarter financial results. A live listen-only web cast of the conference call may be accessed at Johnson Outdoors’ home page.

A replay of the call will be available for 30 days on the Internet.