Vista Outdoor reported earnings on an adjusted basis doubled in the fiscal fourth quarter ended March 31 as sales grew 36 percent. Sales grew 56 percent in the Sporting Products segment due to strong demand, increased volume from the Remington acquisition and favorable pricing and mix. Outdoor Products segment sales grew 15 percent, by double-digit growth across Outdoor Recreation.

For the full fiscal year, sales reached $3.04 billion, up 37 percent with adjusted EPS climbing 127 percent to $8.29.

“The fourth quarter marked our seventh straight quarter of record-breaking financial results,” said Chris Metz, CEO. “Once again, our results were supported by outstanding performance across our portfolio of iconic brands, including the seven new brands acquired over the past 24 months. Upstart innovators QuietKat and Foresight Sports benefited from our corporate model that empowers founders while leveraging shared resources to realize benefits out of reach if on their own. Federal, which just weeks ago celebrated its 100th anniversary, continued to perform well across all calibers, sales channels and with end-consumers who are more diverse and active. The results delivered by our portfolio of businesses, both legacy and new, demonstrate our ability to enhance the performance of outdoor brands regardless of where they fall in the growth and maturity curve. Looking ahead, Vista Outdoor remains well-positioned to continue to capitalize on today’s positive consumer trends. Underlying demand in outdoor recreation remains strong, despite the current macroeconomic headwinds, and we begin fiscal 2023 with positive momentum, from our balance sheet to our leverage ratio to our powerhouse portfolio of brands.

“Today, we also announced a very important strategic step for Vista Outdoor that we believe will unlock significant value for our shareholders and our brands. After a thorough assessment of our business and value creation opportunities, our Board approved a plan to separate our Outdoor Products and Sporting Products segments into two independent, publicly-traded companies. We’re confident we’ve built two strong businesses that are well-positioned for continued growth and success as independent companies. We are very excited to enter this new chapter of growth for the company and remain committed to continuing to deliver value to our shareholders in the near and long-term.”

For the three months ended March 31, 2022 versus the three months ended March 31, 2021:

  • Sales reached a record of $809 million, up 36 percent, driven by demand across Sporting Products and Outdoor Products segments and acquisitions, new product innovation and pricing.
  • Gross profit increased to $287 million, up 58 percent, primarily due to higher sales, favorable pricing and mix and operating leverage.
  • Operating expenses were $135 million, up 32 percent, driven primarily by acquisitions and increased sales and marketing expenses to support higher sales including the return to customer events such as trade shows.
  • Operating leverage improved 43 basis points to 16.6 percent.
  • Earnings before interest and taxes (EBIT) increased to $153 million, compared with $74 million in the prior-year quarter. EBIT margins increased nearly 700 basis points to 18.9 percent. Adjusted EBIT was $160 million, up 99 percent. Adjusted EBIT margins rose more than 600 basis points to 19.8 percent.
  • Diluted earnings per share (EPS) increased to $1.93, compared with $1.11 in the prior-year quarter. Adjusted EPS rose to $2.04, compared with $1.02 in the prior-year quarter, primarily driven by higher sales, gross margin expansion and operating leverage, partially offset by higher taxes.

For the three months ended March 31, 2022 segment results versus the three months ended March 31, 2021:

Sporting Products

  • Sales increased to $464 million, up 56 percent, driven by demand, increased volume from the Remington acquisition and favorable pricing and mix.
  • Gross profit rose to $183 million, up 98 percent. Margin expansion was driven by improved pricing, volume and mix as well as operating leverage from higher volume and operating efficiencies, partially offset by higher input costs.
  • EBIT expanded 128 percent to $151 million.

Outdoor Products

  • Sales rose 15 percent to $345 million, led by double-digit growth across Outdoor Recreation including growth in Action Sports and Outdoor Accessories.
  • Gross profit increased to $106 million, up 16 percent driven primarily by the acquisitions of Foresight Sports and QuietKat, partially offset by higher logistics and input costs.
  • EBIT was $37 million, down 11 percent, due to higher logistics and input costs as well as higher selling and marketing expenses reflecting a return to travel and event participation, including trade shows, compared to the same period last year.

For the twelve months ended March 31, 2022 versus the twelve months ended March 31, 2021:

  • Sales rose 37 percent to more than $3 billion driven by strong consumer demand across both segments and acquisitions.
  • Gross profit increased 75 percent to $1.1 billion due to higher pricing, volume and mix, partially offset by higher logistics and input costs.
  • Operating expenses increased 29 percent driven primarily by acquisitions while operating leverage improved 101 basis points to 15 percent due primarily from operating efficiencies.
  • EBIT rose 127 percent to $646 million and EBIT margin expanded 842 basis points to 21.2 percent. Adjusted EBIT margin increased 933 basis points to nearly 22 percent.
  • EPS increased to $8.00, compared with $4.44 in the prior fiscal year. Adjusted EPS rose to $8.29, or up 127 percent, compared with $3.66 in the prior fiscal year.
  • Cash flow provided by operating activities was $318 million, compared to $345 million in the prior fiscal year. Free cash flow generation was $292 million.

For the twelve months ended March 31, 2022 segment results versus the twelve months ended March 31, 2021:

Sporting Products

  • Sales increased 55 percent to $1.7 billion, driven by the acquisitions of Remington and Hevi-Shot, consumer demand and favorable pricing and mix.
  • Gross profit rose 128 percent to $712 million driven primarily by higher pricing, volume and mix as well as operating leverage from efficiencies.
  • EBIT increased 170 percent to $600 million.

Outdoor Products

  • Sales rose 18 percent to $1.3 billion driven primarily by consumer demand and acquisitions reflecting double-digit growth across Outdoor Recreation, Action Sports and Outdoor Accessories.
  • Gross profit increased 24 percent to $399 million due largely to acquisitions as well as organic growth, partially offset by higher logistics and input costs.
  • EBIT rose 19 percent to $164 million.

Fiscal Year 2023 Outlook
“Following two consecutive years of record performance, we continue to experience strong demand across our diverse portfolio of leading brands, driven in part by lifestyle shifts to spending more quality time outdoors,” said Sudhanshu Priyadarshi, CFOr. “Our fiscal year 2023 guidance reflects these favorable consumer trends while also taking into consideration headwinds related to inflation and supply chain dislocation that we expect to continue for the foreseeable future. That said, we are in a strong financial position with a solid balance sheet and a net debt leverage ratio less than 1.0x following five acquisitions in FY22 as well as ample liquidity. Vista Outdoor is well-positioned to continue to drive growth and long-term shareholder value.”

Vista Outdoor Fiscal Year 2023 Financial Guidance
For Q1 FY23, the company expects:

  • Sales in a range of $3,150 million to $3,250 million, up 5 percent at the midpoint (excludes future acquisitions);
  • Adjusted EBITDA range of 20.5 percent to 21.5 percent;
  • Adjusted earnings per share (EPS) in a range of $7.00 to $7.75;
  • Free Cash Flow in a range of $300 million to $350 million;
  • Effective tax rate of approximately 24 percent;
  • Interest expenses in the range of $25 million to $30 million;
  • R&D expenditure growth in the range of 35 percent to 40 percent;
  • Capital expenditures as a percent of sales of 1 percent to 2 percent;
  • Adjusted earnings per share (EPS) in a range of $7.00 to $7.75;
  • Free Cash Flow in a range of $300 million to $350 million;
  • Effective tax rate of approximately 24 percent;
  • Interest expenses in the range of $25 million to $30 million;
  • R&D expenditure growth in the range of 35 percent to 40 percent;
  • Capital expenditures as a percent of sales of 1 percent to 2 percent;
  • Sales in a range of $770 million to $790 million, up 17.7 percent at the midpoint;
  • Adjusted EBITDA range of 22 percent to 22.5 percent; and
  • Adjusted EPS between $1.85 to $1.95.

Share Repurchases
During fiscal year 2022, the company repurchased 2,980,681 shares for a total of $113 million equating to an average share price of $37.97.

Photo courtesy Vista Outdoor/Bushnell