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Johnson Outdoors reports Q3 FY 2019 results

Johnson Outdoors Inc. (Nasdaq:JOUT) reported increased sales for the company’s 2019 third fiscal quarter ending June 28, 2019. The company stated that continued growth in fishing drove higher revenue during the third quarter and fiscal 2019 year-to-date period.

"Outstanding new product success over the past three years continues to power growth in fishing and sets the stage for exciting innovations on the horizon. At the same time, work continues to strengthen performance in Diving. Camping and Watercraft Recreation are transitioning product lines to capitalize on marketplace evolutions. We feel good about where we are headed,” said Helen Johnson-Leipold, chairman and chief executive officer. “The scope of Johnson Outdoors’ portfolio and the many opportunities for growth it provides puts us in a strong, unique position in an increasingly competitive outdoor recreation industry.”

Fiscal third quarter results reflect in-season replenishment orders for the company’s warm-weather outdoor recreation products. Total company net sales increased 3% to $176.3 million compared to $170.8 million in the previous year quarter. Johnson said key factors behind the year-over-year comparison in each business unit were:

  • Fishing revenue increased 5% due to continued success of new products in both Minn Kota and Humminbird.
  • Growth in Jetboil helped fuel higher revenue in camping.
  • Diving sales were down 3%, but flat on a currency neutral basis versus the prior year period.
  • Watercraft Recreation revenue declines reflect ongoing weakness in paddle boat markets.

Total company operating profit during the quarter was $28.0 million compared to $32.0 million in the prior year’s quarter. Operating expenses for the third quarter increased $4.3 million versus the prior year period due primarily to higher sales volume-related expense, higher bad debt expense, and increased marketing support. Gross margin was 45.2 percent, versus 46.5 percent in the previous quarter, due in part to $1.9 million in tariffs on Chinese components. Net income in the fiscal third quarter was $22.1 million, or $2.19 per diluted share, compared to $23.8 million, or $2.37 per diluted share, in the previous year third quarter.

YEAR-TO-DATE RESULTS

Fiscal 2019 year-to-date net sales grew 1% to $458.4 million versus net sales of $453.1 million in the same fiscal nine-month period last year. Total company operating profit was $61.9 million compared with $65.0 million during the prior fiscal year’s first nine months. While the company said favorable product mix helped offset the impact of $4 million of the aforementioned tariffs on Chinese components, increased operating expenses drove the decline in operating profit year over year. The increase in operating expense was due primarily to bad debt and continued investment in marketing sophistication.

Net income in the fiscal nine-month period improved 4% to $47.5 million, or $4.72 per diluted share, compared with $45.6 million, or $4.54 per diluted share, in the same nine-month period last year. The year-to-date effective tax rate of 24.9% compared favorably to the previous fiscal first nine months, which reflected charges associated with the initial implementation of the new U.S. Tax Reform Act.

“At this time, our clear focus is on ending the year strong and ensuring our brands are well-positioned for the future. We remain confident in our ability and plans to drive ongoing success, and our growing cash and debt-free position enables us to invest in strategic priorities and other opportunities to strengthen our brands and grow our businesses, while consistently paying dividends to shareholders,” said David W. Johnson, chief financial officer.

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