Johnson Outdoor, Inc. continued to deliver double-digit revenue gains in its Watercraft Recreation, Camping and Diving segments in the fiscal first quarter. However, supply chain disruptions and component delays impacted sales in its fishing segment.

In the quarter ended December 31, sales fell 7.3 percent to $153.5 million. On a two-year basis, sales in the latest period were up 20 percent above the pre-pandemic December 2019 quarter’s sales.

“Overall, we are seeing continued strong demand for our products as people continue to be eager to recreate outdoors, while the ongoing global supply chain environment and uncertainties associated with the pandemic continue to be challenging and unpredictable,” said Helen Johnson-Leipold, chairman and CEO, on a conference call with analysts. “We remain laser-focused on working hard to manage supply issues and orders while protecting the health and safety of our employees.”

Fishing Sales Decline 15 Percent
In Fishing, sales were down 14.7 percent to $108.4 million from $127 million due to supply chain disruptions and component delays. Operating profits in the segment fell 41.3 percent to $16.3 million from $27.8 million a year ago. The segment includes

  • Minn Kota fishing motors, batteries and anchors;
  • Cannon downriggers; and
  • Humminbird marine electronics and charts.”

In Fishing, “our largest business demand across all product lines remains strong,” said Johnson-Leipold. “While managing supply chain issues and component delays continue to be critical to helping us fill orders as anglers look to Johnson Outdoors for the best fishing experiences as possible.”

In the Humminbird brand, innovations include Mega Live Imaging, which gives anglers the ability to watch fish and structure in real-time. Johnson-Leipold said, “With the release of Mega Live, anglers access to the complete package of industry-leading technologies and products offered in our One Boat Network platform, which enables our Hummingbird fish finders and Minn Kota motors to work together in unison, giving anglers an effortless command of their boat.”

Minn Kota’s Raptor Shallow Water Anchorcontinues to do well in its second year on the market. The Raptor is the only shallow water anchor to feature Auto-Bottom Mode, which automatically senses the bottom to apply the right hold and active anchoring, which senses when wind and waves pick up and start to threaten a boat’s hold.

Camping Sales Climb 16 Percent
In the Camping segment, sales grew 15.9 percent to $14.1 million from $12.2 million. Operating profits dipped 2.1 percent to $2.75 million from $2.81 million. The segment includes Jetboil outdoor cooking systems and Eureka! camping and hiking equipment.

Johnson-Leipold said both Jetboil and Eureka! continue to benefit from the surge of camping-related participation.

“Demand for Eureka! tents and stoves continue to be strong,” she said.” And, in Jetboil, consumers continue to be excited about the superlight Stash stove that we launched earlier this year. Reducing weight on the trail is critical for backpacking, and the Stash is the lightest, all-in-one backpacking stove system that Jetboil, the technology leader in portable outdoor cooking systems, has ever made.”

Watercraft Recreation Revenues Advance 16 Percent
In the Watercraft Recreation segment, sales rose 15.9 percent to $14.6 million from $12.4 million a year ago. Operating income in the segment vaulted 43.2 percent to $1.53 million from $1.07 million. The segment includes Old Town canoes and kayaks, Ocean Kayak and Carlisle paddles.

Johnson-Leipold called out the popularity of Old Town’s Sportsman line.

“Growth in our fishing kayak segment continues as we’ve outpaced the strong market with the ongoing enthusiasm for our innovative Sportsman line that is starting its third year on the market,” said Johnson-Leipold. “We are constantly looking for ways to integrate our products in the popular Sportsman Autopilot 136, leveraging the game-changing Spot Lock technology from our sister brand Minn Kota to hold position while anglers fish. From the award-winning Autopilot motorized fishing kayak to the versatile pedal-powered Sportsman Salty kayak, the Sportsman line offers a watercraft for anglers in every type of water.”

Diving Sales Improve 16 Percent
The Diving segment, which includes the SCUBAPRO equipment brand, saw sales expand 17.0 percent to $16.5 million from $14.1 million. The segment posted operating earnings of $453,000 against a loss of $341,000 a year ago.

Johnson-Leipold said, “We saw dive markets primarily in the U.S. and other regions in the world experienced some recovery. Our work to promote and support local diving and enhance our global digital presence and strength e-commerce are all working to help this positive growth. We remain focused on these efforts, along with sustained innovation to ensure S ScubaPro’s position as the most trusted dive brand in the world.”

Profits Slump 45 Percent
Earnings fell 44.9 percent to $10.9 million, or $1.07 per share, versus $19.8 million, or $1.96, in the previous year’s first quarter. Compared to the 2019 first quarter, earnings in the latest period more than doubled. Operating profits were down 41.5 percent to $13.8 million from $23.6 million in the prior-year first quarter.

Gross margin of 39.5 percent was down 580 basis points below the prior year primarily due to increases in costs of raw materials and freight as the company continues to take actions to ensure the availability of necessary components. Operating expenses decreased $4.6 million from the prior-year period due primarily to the impact of lower sales volume-driven expenses.

Pricing Actions
Johnson-Leipold said Johnson Outdoors continues to monitor the inflationary environment and has implemented price increases for products where appropriate. The first price increases were effective January 1 and didn’t impact the first quarter. Further pricing actions will continue to evaluate in the future.

Elevated Inventories
David Johnson, CFO, said the company continues to mitigate supply chain challenges. He added, “For example, we continue to maintain higher than normal inventory levels, and we’re also working closely with all of our vendors in planning for alternate sources of supply for critical components where feasible. We’ve also invested in adding capacity and incremental resources where appropriate.”

Inventories closed the period at $217.4 million against $114.8 million at the same time a year ago, a gain of 89.4 percent.

Asked by an analyst about the inventory increase, Johnson-Leipold said, “Well, the inventory increase is just so that we are prepared to meet the demand. However, we still have a lot of inventory due to the components that we’re waiting to get from a supply chain standpoint, and then we can be ready to produce the product and get it in the market. The challenge is waiting for one component yet having everything else ready to go. So, we are prepared. When the supply, those specific pieces show up, we’re ready to go.”

Johnson Outdoors had cash and short-term investments of $167.5 million as of December 31. Johnson Outdoors said its strong balance sheet continues to enable it to invest in strategic opportunities to strengthen the business while consistently paying dividends to shareholders.

Asked about acquisitions, Johnson-Leipold said, “As we’ve always said, we are always looking for acquisition opportunities, and the key is that it’s strategic and brings value to our focus. So we’re out there, and obviously, we’re in good shape with the balance sheet to go after something when it does occur. So we’re very actively looking.”

Photos courtesy Johnson Outdoors/Humminbird