Vista Outdoor, Inc.’s fourth-quarter results met expectations, with sales at its Kinetic Group ammunition segment reaching the lower end of guidance while the Revelyst outdoor segment grew organically for the first time in nine quarters. However, conservative guidance was provided for the new fiscal year as market conditions in both the hunt and outdoor channels remaining challenging.
Revelyst Sees About 2 Percent Decline In Sales In FY25
At Revelyst, sales for the fiscal year ended March 31, 2025 are projected in the range of $1.24 billion to $1.3 billion, down 2.3 percent at the mid-point against $1.3 billion in fiscal 2024. The guidance assumes consumers do not meaningfully change their purchasing patterns due to ongoing economic uncertainties and challenges. The guidance also assumes continued lean ordering patterns by retailers despite signs that industrywide inventory levels are improving.
Andrew Keegan, CFO of Vista Outdoor, said on a call with analysts, “We have observed retail and wholesale channels becoming healthier in recent months in many of the categories we sell. However, inventory levels at certain channels, including the specialty channels at Revelyst’s Adventure Sports, continue to work through inventory burdens. Across most retailers, inventory levels have come down, but the retailers are managing their inventory tightly as we see more just-in-time and smaller quantity orders. We expect this dynamic to continue as we head into fiscal year 2025.”
In the just-completed year, sales at the Revelyst segment slid 2.2 percent to $1.3 billion, with organic sales dropping 10.7 percent, driven by lower volume, increased discounting, and unfavorable mix in the Adventure Sports and Outdoor Performance segments.
Revelyst operates three segments: Adventure Sports (Fox Racing, Bell Helmets, Giro Sport Design, CamelBak, QuietKat Electric Bikes, and Blackburn); Outdoor Performance (Simms Fishing Products, Bushnell, Blackhawk, Stone Glacier, Camp Chef, and Primos) and Precision Sports and Technology (Foresight Sports, Bushnell Golf and Pinseeker).
In the fourth quarter, Revelyst’s sales improved, increasing 1.4 percent to $332 million, driven by increased volume due to new product introductions in the Precision Sports and Technology segment, partially offset by lower volume in Outdoor Performance.
On the positive side, Revelyst’s adjusted EBITDA is projected this year to show significant improvement, landing in the range of $130 million to $160 million. In fiscal 2024, adjusted EBITDA decreased 21.5 percent to $98 million, with the margin decreasing 188 basis points to 7.6 percent.
On the analyst call, Eric Nyman, co-CEO of Vista Outdoor and CEO of Revelyst, touted the early benefits of Revelyst’s Gear Up transformation strategy, expected to deliver $25 million to $30 million of run-rate cost savings in FY25, supporting the potential to double standalone. He said, “We are on track for our long-term goal of realizing $100 million of run-rate cost savings in fiscal year 2027 from the Gear Up program.”
In the fourth quarter, adjusted EBITDA at Revelyst surged 209.5 percent to $29 million. Adjusted EBITDA margin increased 590 basis points to 8.8 percent.
“While in the short term, we do not expect consumers to meaningfully change purchasing patterns due to ongoing macro-economic uncertainties, we are confident that Revelyst’s operational and organizational improvements will continue to positively impact profitability in both the short and the long term,” said Nyman. “We reaffirm our ability to double our standalone adjusted EBITA in fiscal year 2025 and longer- term believe that Revelyst’s standalone adjusted EBITA margins will be in the mid-teens.”
Regarding growth opportunities, he highlighted Revelyst’s purchase in the quarter of Pinseeker, an off-course golf simulator and connectivity app that hosts real-time virtual closest-to-the-pin tournaments. He said, “We believe we are poised to revolutionize off-course golf, a tremendous growth opportunity where participation reached a new all-time high in 2023, expanding to 33 million participants.”
Among other brands, he noted a recent survey showed 98 percent of golfers on the Players Championship field use Bushnell Golf’s laser rangefinder in preparation for their on-course competition.
In the Adventure Sports platform, Nyman highlighted Fox Racing’s launch of the V3 Rs helmet, which he described as “the most advanced motocross helmet in the brand’s 50-year history.” He also called out a Fox Racing collaboration with the Supreme streetwear brand to support its lifestyle offerings. Also, within the Adventure Sports segment, he highlighted Giro’s new partnership to supply cycling helmets for Team Visma.
In the Outdoor Performance segment, he called out Simms capturing eight Customer Gear awards at the 2024 Fly Fishing Show, more than any other brand, and Stone Glacier’s launch of a new lifestyle apparel range for hunters.
“I remain confident in the strategy and vision that we have developed at Revelyst,” said Nyman. “We are transforming our organization into the leading global integrated house of brands in the outdoor industry to deliver wildly human experiences for our consumers.”
Nyman also said underlying demand remained solid. Revelyst’s direct-to-consumer (DTC) sales across platforms continue to gain traction, growing approximately 5 percent year over year during both Q4 and the full year. Revelyst’s Precision Sports and Technology platform led the gains in the quarter, improving DTC sales by 16 percent in the quarter. For the year, DTC revenue at the Adventure Sports segment gained 15 percent.
Nyman said, “We were excited about these results, which show the demand for our brands is strong absent the inventory noise within wholesale and retail channels.”
Kinetic Sees About 3 Percent Decline In Sales In FY25
The Kinetic Group’s sales for the current fiscal year are expected to be in the range of $1.425 billion to $1.475 billion, down 3.3 percent year-over-year. A global powder shortage, increasing input costs, including for copper and powder, and competitive market pricing are expected to pressure Kinetic’s top and bottom lines during the year.
Kinetic includes the Federal, Remington, CCI, Hevi-Shot, and Speer ammunition brands.
Kinetic’s sales tumbled 17.4 percent in FY24 to $1.5 billion, driven by lower volume across nearly all categories as channel inventory has normalized, the termination of the Lake City contract at the beginning of the third fiscal quarter in the prior fiscal year, and lower pricing. These decreases were partially offset by increased shipments and lower discounting.
In the fourth quarter, Kinetic’s sales decreased 12.5 percent to $362 million due to lower volume across nearly all categories and lower pricing.
On the analyst call, Jason Vanderbrink, co-CEO of Vista Outdoor and CEO of Kinetic, said his team was “encouraged” by the fourth-quarter performance.
“We have a strong order position, and there are backlogs in several product categories that strengthen our confidence in delivering our financial expectations,” said Vanderbrink. “We have some challenges ahead related to higher commodity input costs, including powder and copper. But pricing actions taken to offset the increased production costs have not impacted open orders.”
Vanderbrink said POS data from a select group of retail partners indicates self-through remains strong, with double-digit increases in handguns, shotshell and rifle ammunition year-over-year by a number of rounds in each of those categories, along with the positive sell-through trends. Added Vanderbrink, “We remain encouraged by overall inventory levels, which have remained stable over the last quarter.”
He also cited strength with the hunting enthusiast as April marked the 57th straight month adjusted NICS checks data surpassed more than 1 million firearms checks. Said Vanderbrink, “This continued high monthly volume supports a healthy and higher baseline of shooting and hunting participants.”
He likewise noted that several products were launched by Federal, Remington and CCI “to great fanfare” at the annual SHOT Show.
Kinetic’s adjusted EBITDA for the current fiscal year is expected to be in the range of $350 million to $400 million, slightly down against FY24 levels. FY24 adjusted EBITDA decreased 28.0 percent to $416 million, with the margin eroding 422 basis points to 28.6 percent.
For the fourth quarter, Kinetic’s adjusted EBITDA decreased 23.3 percent to $100 million, with the margin decreasing 392 basis points to 27.7 percent.
Last October, Vista agreed to sell Kinetic to Prague-based Czechoslovak Group (CSG) for $1.9 billion. As part of the deal, Vista’s outdoor products company would become a standalone public company, Revelyst Inc.
Nyman said, ‘”We continue to be confident in our ability to receive CFIUS clearance with respect to the CSG transaction, and the Board continues to recommend Vista stockholders vote in favor of the proposal to adopt the merger agreement with CSG.”
Vista officials declined to discuss its board of directors’ discussions with Texas-based investment group MNC Capital over a potential bid for the company. Vista is looking for MNC to up the ante in pursuing the whole company rather than splitting it into two new entities through the CSG deal.
Companywide, sales in the quarter decreased 6.4 percent to $694 million. Adjusted EBITDA decreased 7.5 percent to $109 million, with the margin decreasing 20 basis points to 15.7 percent.
Net income increased to $40 million, or 69 cents per share, against a loss after charges of $294.3 million, or $5.18. Adjusted EPS decreased to $1.02, or down 2.9 percent compared with $1.05 in the prior fiscal year period.
For the full year, sales slumped 10.8 percent to $2.7 billion and organic sales were $2.6 billion, down 14.5 percent. Adjusted EBITDA declined 27.8 percent to $442 million, with the margin decreasing 378 basis points to 16.1 percent.
The net loss in the year came to $6 million, or 10 cents a share, against a loss of $9.7 million, or 17 cents, a year ago. Adjusted EPS declined 38.3 percent to $3.86 compared with $6.26 in the prior fiscal year.
Overall sales for FY25 are expected to be in the range of $2.665 billion to $2.775 billion, adjusted EBITDA in the range of $410 million to $490 million, and EPS in the range of $3.60 to $4.50.
Image courtesy Fox Racing
