On August 5, 2024, Vista Outdoor Inc (VSTO, Financial) released its 8-K filing for the first quarter of fiscal year 2025, ending June 30, 2024. Vista Outdoor Inc designs, develops, and manufactures outdoor sports and recreation products, operating through segments such as the Kinetic Group and Revelyst. The majority of the company's revenue is generated from its Kinetic Group segment, which includes its ammunition brands.
Performance Overview
Vista Outdoor Inc reported a 7.1% decrease in sales to $644 million, missing the analyst revenue estimate of $657.57 million. However, the company posted a diluted earnings per share (EPS) of $0.97, slightly beating the analyst estimate of $0.94. The company's gross profit also saw a decline of 6.9% to $211 million, primarily due to decreased volume and increased inflationary costs.
Segment Performance
The Kinetic Group reported a 1.6% decrease in sales to $370 million, driven by lower shipments across nearly all categories, partially offset by increased prices. The segment's gross profit also declined by 1.6% to $130 million. Operating income for the Kinetic Group decreased by 3.8% to $104 million.
Revelyst, on the other hand, experienced a 13.6% decline in sales to $274 million, attributed to pre-order delivery timing delays and unfavorable product mix. The segment's gross profit decreased by 14.2% to $81 million, and it reported an operating loss of $2 million.
Financial Achievements and Challenges
Despite the challenges, Vista Outdoor Inc achieved strong cash flow metrics. The company reported cash provided by operating activities of $54 million and adjusted free cash flow of $70 million. Total debt decreased by $85 million sequentially to $635 million, resulting in a net debt of $579 million and a net debt leverage ratio of 1.3x.
"The Board is committed to acting in the best interests of the Company and its stockholders," said Mike Callahan, Chairman of the Board of Directors. "We are continuing our engagement with both CSG and MNC and its private equity partner as well as exploring a full range of alternatives for Revelyst and other strategic alternatives in order to maximize the value for stockholders."
Income Statement Highlights
| Metric | Q1 FY2025 | Q1 FY2024 |
|---|---|---|
| Sales | $644 million | $693 million |
| Gross Profit | $211 million | $226 million |
| Operating Income | $81 million | $92 million |
| Net Income | $57 million | $58 million |
| Diluted EPS | $0.97 | $0.99 |
Balance Sheet and Cash Flow
Vista Outdoor Inc's balance sheet remains robust, with a significant reduction in net debt. The company also reported a decrease in inventory levels by approximately $100 million from the previous year, contributing to the overall health of the balance sheet.
Outlook and Guidance
Vista Outdoor Inc reaffirmed its fiscal year 2025 guidance, expecting sales in the range of $2.665 billion to $2.775 billion and adjusted EBITDA between $410 million and $490 million. The company also anticipates EPS in the range of $3.56 to $4.46 and adjusted EPS between $3.60 and $4.50.
"Our balance sheet remains strong and we generated robust cash provided by operating activities of $54 million and adjusted free cash flow of $70 million which drove a decrease in our net debt of $85 million during the quarter to $579 million and improved our net debt leverage ratio to 1.3x," said Andrew Keegan, CFO of Vista Outdoor.
For more detailed insights and to access the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Vista Outdoor Inc for further details.
