Johnson Outdoors’ Shares Rebound Day After Q1 Miss

By Eric Smith

Shares of Johnson Outdoors climbed $1.75, or 3 percent, to $61.02 at market close Tuesday (after being up in the mid-single digits in midday trading) despite its previous day report of a first-quarter earnings and revenue miss.

The company’s shares had slid after Monday it reported revenue dropped 10.4 percent to $104.4 million in the first quarter ended December 28, missing analysts’ estimates by $12.4 million. The company reported net income of $3.5 million, or 35 cents per diluted share, versus $2 million, or 2 cents per diluted share, in the previous year’s quarter. That missed expectations by 4 cents a share.

Q1 is typically slow for the company, and that was especially true this fiscal year with new fishing products rolling out soon.

“The warm weather outdoor recreational industry is in preseason ramp-up mode, preparing for the primary selling period during the second and third quarters,” CEO Helen Johnson-Leipold said on Monday’s earnings conference call with analysts. “Consequently, first quarter results alone are not necessarily indicative of full year performance. As the season ticks into gear, we will start to see consumer sell-through, which we believe is the truest measure of new product success.”

First-quarter revenues not only missed estimates but also fell shy of the $116.6 million mark from Johnson Outdoors’ prior-year quarter. In addition to the new product releases, here are some other highlights from the company’s Q1 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.

Tuesday’s rebound was good news for the company, which is touting new product releases in its fishing category and banking on an upbeat season as the sport prepares to crank up in Q2 and Q3.

“This year’s exciting new product lineup particularly in fishing is building strong favorable momentum heading into the major selling season for warm weather outdoor products,” Johnson-Leipold said. “We said that the past two years have tremendous growth in fishing with unprecedented and that we expected this business would continue to grow at a more moderate pace going forward. And based on everything we are seeing at this time, we still expect year-over-year sales growth in fiscal 2019. And as we take the longer-term view beyond 2019, the future looks great.

She then outlined Johnson Outdoors’ 2021 strategic plan, which relies on continued strong participation in fishing, camping and hiking, paddling and diving; a commitment to delivering the “best outdoor rec experience possible” to customers; and a “distinct unique competitive advantage.”

“In the years ahead,” Johnson-Leipold said, “we will build on our strength, grow our capacity and expand our capability.”

The company’s five drivers to that growth are:

• Sustained and more intense focus on the high potential outdoor recreational consumer segments. Johnson-Leipold: “More than ever, our goal is to be at one with the consumers knowing who they are, where they are and what makes them tick. It’s all about uncovering the key insights that will lead to bigger, better, new products success and deeper relationships between our consumers and our brands year-after-year. Importantly these insights enable us to better target the right consumer with the right product in the right place and in the right way. That’s a winning combination in every marketplace.”
• Accelerated digital sophistication. Johnson-Leipold: “More and more, people go online to learn about outdoor recreational activities and plan their trips. It’s where they shop or gear by equipment and share their outdoor experiences. We have built the infrastructure and framework necessary to ensure our consumers have a great online experience in today’s rapidly changing digital age. Now, we are focused on strengthening our marketing and e-commerce resources to maximize these investments to drive growth across our distribution channel.”
• Sustained innovation leadership. Johnson-Leipold: “We have iconic brand and the legacy pioneering innovation in our space. We continue to refine an improved and robust innovation process to ensure continuous pipeline of new products that provide distinct meaningful added value for our target outdoor consumer. Products would value that extend beyond a single new product cycle. We are very pleased by the positive momentum that’s been building behind our Johnson Outdoors 2019 new product line up. For example, we are getting great response to our new one boat network platform in Fishing which enhances the ease and fun for anglers by enabling Minn Kota and Humminbird products to work together in unison.
• Identifying new sources of growth. Johnson-Leipold: “In our markets, we are looking at new organic growth, new applications of technology and of course, new brands and technologies. We have got an active radar screen always giving us a view to the companies, the brands and the technologies that are out there. Importantly, our strong cash position provides us the opportunity to move when the right opportunity at the right price comes along.”
• Recognizing “the secret sauce” behind the company’s 50-year legacy of growth. Johnson-Leipold: “Very simply, at our core, Johnson Outdoors is a family of adventures, people with a passion to fish, camp, hike, scuba dive and paddle. Our love for the outdoor recreation is a unique common bond we share with outdoor adventures everywhere. We know what makes a great outdoor experience and job number one every day for everyone here is to stay on the cutting edge of design and technology to deliver just that. Our ability to continue to grow our family of talented inspired adventures is key to long-term success.”

Johnson Outdoors brands include: Old Town canoes and kayaks; Ocean Kayak; Carlisle paddles; Minn Kota fishing motors, batteries and anchors; Cannon downriggers; Humminbird marine electronics and charts; SCUBAPRO dive equipment; Jetboil outdoor cooking systems; and Eureka camping and hiking equipment.

Photo courtesy Johnson Outdoors

[author] [author_image timthumb=’on’]https://s.gravatar.com/avatar/dec6c8d990a5a173d9ae43e334e44145?s=80[/author_image] [author_info]Eric Smith is Senior Business Editor at SGB Media. Reach him at eric@sgbonline.com or 303-578-7008. Follow on Twitter or connect on LinkedIn.[/author_info] [/author]