By Eric Smith
Outdoor Retailer is “making good progress” on convincing the industry that the three-show cycle—November for Winter Market, January for Snow Show and June for Summer Market—is the right cadence for buying cycles, according to Phil Evans, interim president and CEO and CFO of parent company Emerald Expositions Events Inc.
“We’re pleased with the industry reaction to the show and a seeing exhibitors and attendees continue to adapt to the three-show annual cycle,” Evans said on Thursday’s earnings call with analysts following the release of the company’s first-quarter results.
Emerald earlier in the day had reported net income decreased 30.4 percent in the first quarter ended March 31 on a 3.4 percent decline in revenues. The company now expects its full-year performance to be in the lower half of the previously communicated guidance range.
While Evans didn’t dwell too much on OR, nor did the analysts on the call inquire about the shows (Emerald operates numerous other B2B events that drew their attention), he did say that revenue from the last two Outdoor Retailer shows for the winter buying season—Winter Market and Snow Show—combined was 40 percent higher than the previous year when it hosted only Snow Show.
Immediately after Snow Show, in early February, Evans said revenue for that event was expected to be down in the mid-single digits even as the show’s mood and energy were “excellent.”
Emails to both Emerald’s investor relations team and Outdoor Retailer leaders on Friday for further comment about Snow Show’s 2019 revenue had not been returned as of press time.
Outdoor Retailer’s upcoming schedule is June 18-20 for Summer Market, November 5-7 for Winter Market and January 29-31, 2020, for Snow Show. For now, it seems, there are no changes slated for that lineup, although the summer and winter shows shrunk to three days from four and some attendees have expressed concern about the viability of so many events, especially November’s Winter Market.
But Evans’ progression of commentary over Emerald’s last three earnings calls indicates the C-suite is comfortable with the current show format, which wasn’t the case six months ago.
On November 2, right before Winter Market’s Denver and November debut, Evans noted that softness in that event’s bookings were part of the reason Emerald was lowering organic growth revenue expectations for the year.
“…With the reduction in our expectations for the new Outdoor Retailer November show and the deferral of two planned [trade show] launches, we’re now expecting to be slightly below the lower end of those guidance ranges with the year largely complete,” Evans said on an earnings call, acknowledging that the show was receiving mixed reviews leading up to it.
And then, during the Q4 2018 earnings call in February, which fell a couple of weeks after the 2019 Snow Show concluded, Evans provided the aforementioned conflicting commentary on that event’s financial performance. But on that call, he said the company’s overall assessment of the three OR shows this year was upbeat.
“We expect the three [2019] Outdoor Retailer shows to be slightly positive in revenue in aggregate versus 2018, as the prior year included the large single winter event in January 2018 and also benefited from the new November event,” he said on the February call. “It’s encouraging that we’ve received early orders for the November 2019 show from several influential brands, including Patagonia and The North Face, neither of whom participated in the inaugural 2018 event.”
Fast forward to Thursday, and Evans issued some broader comments on the company’s view of its current trade show lineup, which could shed some light on the future of Outdoor Retailer.
For one, the company is bullish on Summer Market falling in second quarter—last year it was in July (third quarter)—which should give the next period a boost. And when asked if there were any “drastic” measures Emerald would consider around divestitures or canceling of more shows (Emerald killed Interbike for this year), Evans said, “the short answer is no.”
“We haven’t had discussions other than clearly we review the performance of individual shows and industries … ,” he said. “We’re partway through a more detailed strategy exercise in anticipation of the [new] CEO coming in to really explain the positions we have, the opportunities we see. Once we get through that process and the CEO joins, I can’t say that we wouldn’t choose to invest in certain areas … and not in other areas. But we certainly have no plan at the moment. As we look across the portfolio, there are very few assets that we have that we don’t think we could grow.
“We’re investing in the business, and overall, we think we’re on the right track.”
Emerald reported revenues of $137.4 million compared to revenues of $142.2 million for the first quarter of 2018, a decrease of $4.8 million, or 3.4 percent. The decrease reflected a net $7.4 million reduction from several show scheduling differences in the first quarter of 2019. After adjusting organic revenues for the first quarter of each of 2018 and 2019 for the show timing differences, organic revenues for the first quarter of 2019, were down $3 million, or 2.2 percent.
Net income of $26.5 million for the first quarter of 2019 decreased by 30.4 percent, or $11.6 million, from $38.1 million for the first quarter of 2018. The key drivers of the decrease were the lower revenues and increased expenses.
For Q1 2019, adjusted EBITDA was $59.4 million, compared to $68.4 million for the first quarter of 2018, after adjusting for the show scheduling differences described above. The decrease in Adjusted EBITDA of $9 million, or 13.2 percent, was driven predominantly by the performance of Emerald’s NY NOW, as well as incremental investment spending.
“I am encouraged by the progress we have achieved in our efforts to stabilize our largest shows,” Evans said. “I remain confident that we are taking the right actions to position our portfolio for sustained organic growth.”
Read the full report on Emerald’s Q1 earnings here.
Meanwhile, Outdoor Retailer has issued a host of press releases related to upcoming shows. Here are a few highlights:
- OR recently released its floorplan for Summer Market.
- It also announced the judges for the ninth annual Outdoor Retailer Inspiration Awards presented by Adidas Outdoor. The nomination deadline for the awards was extended to May 10, and winners will be announced on Day 1 of Summer Market.
- In March, Outdoor Retailer announced the introduction of bikes at Outdoor Retailer Winter Market in 2019.
- At the same time OR said it would move the Summer Market Demo Experience to a new location, Chatfield State Park in Littleton, CO.
Photo courtesy Outdoor Retailer
[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]