Benefitting from season replenishment orders for the company’s warm-weather outdoor recreation products, Johnson Outdoors delivered record earnings and sales in the third quarter ended June 29.

Revenues grew 10.0 percent to $170.8 million, benefiting from favorable marketplace momentum for new products, particularly in Fishing and Camping. Foreign currency translation had a favorable 1 percent impact on net sales.

Total company operating profit grew 29.6 percent to $32.0 million while net income rose 43.4 percent to $23.8 million, or $2.37 a share.

“Unprecedented growth in our flagship Fishing brands throughout the year underscores the importance of our ongoing emphasis on consumer insight driven innovation,” said Helen Johnson-Leipold, chairman and CEO, on a conference call with analysts.  “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.”

Among segments, Fishing sales grew 17.3 percent to $121.9 million. Operating income in the segment expanded 36.0 percent to $33.0 million. 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.

Over the last 18 months, new products account for 60 percent of revenues in the Fishing segment versus typically about a third of revenues.

Product highlights in the quarter included the Ultrex, Minn Kota’s first electric steer motor for foot pedal control enthusiasts with GPS and wireless capabilities. Minn Kota is also benefiting from a technical re-stage across the brand’s entire steer line. Legacy innovations such as Ulterra, Minn Kota first stow and deploy motor and the I-Pilot Link accessory line continue to see strong demand.

Humminbird’s MEGA Side Imaging and MEGA Down Imaging fish-finder technologies drove significant growth for the brand’s Helix line of mid-to-larger screen models. The Humminbird Solix, described by Johnson-Leipold as the “biggest display fish finder ever,” is also doing well.

Looking ahead, the new Minn Kota Ultrex with Built-In Mega Down Imaging grabbed Best Boating Accessory honors at the 2018 ICAST. Beginning next year, select models of Minn Kota bow-mounted trolling motors will be available with the Humminbird MEGA Down Imaging transducer and wiring fully integrated, providing clean rigging protected from wear and tear and anglers crystal clear viewing directly below the boat.

The sales gains in the Fishing segment are expected to moderate from the outsized performance in the last few quarters, although the focus on investing in “consumer insight driven innovation” will continue, said Johnson-Leipold.

In the Camping segment, revenues climbed 14.7 percent to $13.9 million while operating income jumped 48.3 percent to $2.2 million, bolstered by additional gains in military and commercial segments. That represents a strong bounce-back from the second quarter, when sales in the segment fell 11.4 percent primarily due to the divesture of the Silva brand and decreases in military tent revenue.

Johnson-Leipold said of the Camping segment overall, “New products are starting to gain traction in a market that is coming off two very challenging years due to retail customer bankruptcies and consolidation.”

Camping’s gains were driven by double-digit gains in Jetboil, which Johnson-Leipold said is benefiting from the company’s positon as the “technology leader in the growing camp-cook segment.” Jetbil continues to expand the company’s offerings by leveraging the company’s lightweight and compact design, easy-button start and other advancements.

A standout launch for Jetboil was the Flash cooking and stove system that can boil water in less than 100 seconds. New products are expected to account for a third of Jetboil’s sales this year.

Eureka! also returned to growth. David Johnson, CFO, said, “Eureka! had a good quarter as well, and hopefully we’ll continue to see that, but there’s some work to do there.”

In the Watercraft Recreation segment, sales fell 18.4 percent to $14.1 million. Operating profits tumbled 72.7 percent to $661,000. Kayak market weakness affecting all segments and channels continued to negatively impact Watercraft Recreation sales. Johnson-Leipold said a focus on new products in Watercraft Recreation is “enabling us to maintain our market position against the tide of a very weak market and challenging conditions.”

Diving segment revenues were down 5.5 percent in the quarter to $20.8 million from $22.0 million, but operating profits grew 23.4 percent to $1.5 million. The transition to a new distribution model in Japan over the past year led to the unfavorable year-over-year revenue comparison for the segment.

Johnson-Leipold likewise said new products are expected to account for more than a third of the Diving segment’s sales this year with a focus on new launches in core life supporting categories further strengthening brand equity and competitiveness for the core Scubapro line. Two examples of items seeing strong demand were the S620 breathing regulator and the Hydro Pro buoyancy compensator.

Looking ahead, Johnson-Leipold said the focus remains on three priorities: richer consumer insights, enhanced innovation processes and digital sophistication.

She noted that Johnson Outdoors has entered the implementation phase of the company’s digital transformation and is beginning to see an uptick in e-commerce sales across very build. The company has been investing in online capabilities over the last two years to support commerce and outreach efforts.

She added, “Future plans will focus on strategies targeted on fully leveraging our company-wide digital transformation and data analytics to enhance accelerated profitable growth for all channels long-term.”

Johnson said that looking ahead to 2019, the company is in the process of determining the impact and mitigating the impact of recently announced U.S. tariffs and retributive sanctions in other countries,

Johnson added, “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.”

Officials indicated they are still looking for acquisitions.

Said Johnson-Leipold, “M&A is front and center, and we’re always looking. We’re looking for the right strategic fit. It’s a competitive market out there and the multiples are pretty high. But we’re not about buying to grow the volume; we’re into buying to enhance our product lineup and what we offer. So it’s a matter of what’s available and what we find but we are looking.”

The last acquisition, Northport Systems, a provider of cartography technologies that has been integrated into the Minn Kota and Humminbird lines, was made in April 2016.

Photo courtesy Jetboil