Johnson Outdoors Inc. (NASDAQ: JOUT) announced lower sales and higher net income year-over-year for the Company’s first fiscal quarter ended Dec. 28, 2018.
“We are building momentum behind an exciting new product line-up, particularly in Fishing, as we head into the primary selling period for our warm-weather outdoor products. At this time, we continue to anticipate year-over-year revenue growth in fiscal 2019. We believe our brands are well-positioned for marketplace success and confident in Johnson Outdoors’ sustained industry leadership long-term,” said Helen Johnson-Leipold, Chairman and Chief Executive Officer.
During the first fiscal quarter, the Company is ramping up for the primary selling period of its warm-weather outdoor recreation products across the second and third fiscal quarters. Total Company net sales in the quarter declined 10 percent to $104.4 million compared to net sales of $116.6 million in the prior year quarter. Key contributing factors to the results were:
- A shift in pacing of new product releases this fiscal led to an unfavorable year-over-year comparison in Fishing sales.
- Diving sales declined 11 percent due primarily to weakness in Asian dive markets and a two percent negative impact of foreign currency translation.
- Positive momentum in Jetboil kept Camping revenue on par with the prior year quarter.
- Watercraft Recreation sales were flat to last year’s first quarter despite challenging market conditions.
Total Company operating profit for the first fiscal quarter was $6.0 million vs. $7.0 million in the prior year first quarter. Gross margin improved quarter-to-quarter, despite a $0.7 million unfavorable impact from recently enacted tariffs in the first three months of the fiscal year.
Operating expenses benefitted from a decline in deferred compensation expense due to a $2.3 million downward adjustment in the valuation of the plan’s assets, however, an offsetting loss was reflected in other expenses.
The Company reported net income of $3.5 million, or $0.35 per diluted share, versus $0.2 million, or $0.02 per diluted share, in the previous year’s quarter. The Company’s effective tax rate for the quarter was 18.7 percent compared to an effective rate of 97.2 percent in the prior year first quarter. The prior year’s rate was significantly impacted by a one-time transition tax related to new U.S. tax legislation in that period.