On August 5, 2024, Johnson Outdoors Inc (JOUT, Financial) released its 8-K filing for the third fiscal quarter ending June 28, 2024. Johnson Outdoors Inc is a manufacturer and marketer of branded seasonal, outdoor recreation products used for fishing from a boat, diving, paddling, hiking, and camping. The company operates in four segments: Fishing, Camping, Watercraft Recreation, and Diving, with the majority of its revenue derived from the Fishing segment.
Third Quarter Performance
Johnson Outdoors Inc (JOUT, Financial) reported a decline in total company net sales by 8% to $172.5 million compared to $187.0 million in the prior year’s third fiscal quarter. This figure fell short of the analyst estimate of $176.14 million. The company also reported an operating loss of $0.5 million, a significant drop from the operating profit of $17.4 million in the same quarter last year. Gross margin decreased to 35.8% from 41.5% in the prior year quarter, primarily due to unfavorable overhead absorption and changes in the product mix toward lower-margin products.
Financial Achievements and Challenges
Despite the challenging marketplace conditions, Johnson Outdoors Inc (JOUT, Financial) remains committed to investing in revenue and profit-generating initiatives in innovation and digital and e-commerce capabilities. The company’s debt-free balance sheet and cash position continue to enable strategic investments to strengthen its brands and business.
“Challenging marketplace conditions, primarily due to lower consumer demand for outdoor recreation products and heavy promotional activity, have impacted our performance. As a result, we are evaluating all aspects of the business to improve our financial results and are working to redeploy resources to enable growth for the future,” said Helen Johnson-Leipold, Chairman and Chief Executive Officer.
Income Statement Highlights
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $172.5 million | $187.0 million |
| Gross Profit | $61.8 million | $77.6 million |
| Operating (Loss) Profit | $(0.5) million | $17.4 million |
| Net Income | $1.6 million | $14.8 million |
| Net Income per Diluted Share | $0.16 | $1.44 |
Year-to-Date Results
For the first nine months of fiscal 2024, net sales were $487.0 million, a 14% decrease from the previous year’s $567.5 million. The company reported an operating loss of $0.7 million compared to a profit of $34.3 million in the prior year-to-date period. Net income for the nine-month period was $7.7 million, or $0.75 per diluted share, down from $35.5 million, or $3.47 per diluted share, in the previous year.
Balance Sheet and Cash Flow
As of June 28, 2024, Johnson Outdoors Inc (JOUT, Financial) reported cash and short-term investments of $148.4 million. Depreciation and amortization expenses were $14.8 million for the nine-month period, compared to $11.8 million in the prior year. Capital spending totaled $16.4 million, down from $19.4 million in the previous year.
“Profits remain impacted by lower sales volumes and our ongoing investment in promotional activity. Additionally, while we’ve been improving our inventory levels, progress has been slowed by the decreased demand,” said David W. Johnson, Vice President and Chief Financial Officer.
Segment Performance
| Segment | Q3 2024 Net Sales | Q3 2023 Net Sales |
|---|---|---|
| Fishing | $130.5 million | $137.5 million |
| Camping | $10.9 million | $11.7 million |
| Watercraft Recreation | $11.1 million | $15.7 million |
| Diving | $19.9 million | $22.2 million |
Analysis
Johnson Outdoors Inc (JOUT, Financial) faces significant challenges due to lower consumer demand and heavy promotional activity. The decline in sales and gross margin highlights the impact of these market conditions. However, the company’s strategic investments in innovation and digital capabilities, along with its strong balance sheet, position it for potential long-term success. Investors should monitor the company’s efforts to improve financial results and manage inventory levels in the coming quarters.
Explore the complete 8-K earnings release (here) from Johnson Outdoors Inc for further details.
