Jarden Attributes Q4 Miss at Outdoor Segment to Diminishing Headwinds

 

Net sales at the segment, which owns one of the world’s largest portfolios of sporting goods brands, came in essentially flat with a year earlier at $617.8 million. Organic net sales, which exclude the impacts of foreign exchange, acquisitions and discontinued businesses, grew 1.7 percent over their level a year earlier. While that was well below the 3 to 5 percent goal the company targets as a whole, Jarden reported companywide organic sales increased 4.0 percent thanks to a strong performance at its other two global consumer products segments.

 

JOS earnings, which do reflect the impact of currency exchange rates, reached $48.7 million in the quarter ended Dec. 31, 2013, down 21.1 percent compared with $61.7 million a year earlier. The segment reported an operating loss of $1.9 million after recording $10.3 million in reorganization costs, compared with just $3.3 million in the fourth quarter of 2012, when operating margins reached 6.7 percent. Acquisition and integration related costs were $25.1 million compared to zero a year earlier, while depreciation and amortization costs dipped $2 million to $15.2 million. For the full year,

operating earnings declined 21.8 percent to $196.1 million.

 

Coleman, Technical Apparel (Marmot, ExOfficio, Zoot) and Volkl experienced broad-based revenue growth, while sales of Abu Garcia’s new Reva Reel and K2’s new Pinnacle walk-ski boot exceeded expectations. Jarden Team Sports experienced good success with licensed NFL and NCAA products ranging from coolers produced with Coleman and Lifoam to canopy shelters.

 

The early arrival of cold weather, however, cut the fishing season short across much of the globe and Jarden’s conservative build-to-order approach to its ski and snowboard business (K2, Marker, Ride, Volkl) meant it had little upside there.

 

“We told people that we weren’t going to build extra skis so there wasn’t a huge revenue opportunity,” said Jarden Corp. CEO Jim Lillie.

 

Jarden is forecasting the segment will see organic sales growth in the 3-to-5-percent range in 2014 as strong sell-through of winter product encourages and enables dealers to bring in more merchandise for the spring and fall. Exchange rates are expected to reduce revenues by approximately $60 million to $75 million, compared with the $113 million experienced in 2013.

 

“Looking at where we ended 2013 on load-ins, we don’t see the headwinds that we saw last year,” Lillie said in reference to the drop in pre-season orders JOS saw in 2013. “We just had a couple of international ski shows and I would say the receptivity to new products and the opportunities exist in the plan for the back half of the year much more so than they have over the last two or three years.”