Johnson Outdoors Inc. said its usual fiscal first quarter losses resumed in three months ended Dec. 27 as cold weather prevented early shipments of spring gear that resulted in an unusual profit in the quarter a year ago.


The Wisconsin company reported sales fell 7.9 percent to $79.1 million in the quarter ended Dec. 27, due to a shift in orders at its Marine Electronics segment, continued declines in tent sales to the military and lower international sales of paddle sports and diving products due largely to weak demand in Europe.

Operating losses reached $2.9 million compared to an unusual profit of $1.5 million in the first quarter of FY 2013. JOUT attributed the loss to lower volume, a less favorable product mix and higher healthcare and deferred compensation costs. As a result, JOUT swung to a net loss of $2.2 million compared with net earnings of $200,000 a year earlier.

“Last year, we benefited from unusually early new product shipments during the first quarter and this year, the early onset of harsh winter conditions that shifted the timing of new products, orders and shipments,” said Chairman and CEO Helen Johnson-Leipold.

The company ended the quarter with nearly $10 million more inventory, up 13 percent for the year ago quarter.

“New products drove the increase in inventory year-over-year, and we are working diligently to manage levels down and control expenses without compromising our ability to meet customer demand and expectations throughout the coming season,” said VP and CFO David W. Johnson.

While many outdoor specialty retailers have sold through their winter products, he said few have moved up their orders for JOUT’s spring and summer gear.

Johnson-Leipold noted the cold weather could cut both ways. On the one hand, a long and cold winter that keeps lakes frozen past March could shorten the fishing season. On the other hand, strong sales of winter sports gear means retailers are flush with cash and need inventory and consumers are eager to spend on outdoor recreation.

“If these positive consumer trends continue into the warm weather outdoor rec season, we feel we're in a very good position to capitalize on the opportunity,” said Johnson-Leipold.

Johnson-Leipold disclosed that the company’s flagship Marine Electronics segment is in the midst of two major projects at Humminbird, which makes a range of devices that enable fishermen put their boats on auto-pilot, find fish, view navigation charts and contour maps, measure depth, temperature and barometric pressure and remotely control their trolling motors. First, it is upgrading the operating system used by more than half of Humminbird’s high-end models in anticipation of fishermen’s growing performance expectations. Secondly, it is lowering prices across much of the rest of the line, including gear needed to connect its many products together, to enhance its competitive position.

“Demand for both Minn Kota and Humminbird new products are on track, and we feel good about our competitive position and our ability to maintain market leadership,” said Johnson-Leipold.

JOUT expects its new ScubaPro Chromis and Aladin Square dive computers will boost profits at its Dive segment when they ship this spring. David Johnson said he thinks the Outdoor Gear segments sales to the military will likely be flat in 2014.

The Watercraft segment, meanwhile, probably won’t return to profitability until the end of 2015, said Leipold-Johnson. The segment, which owns the Necky, Ocean Kayak and Old Town kayak and canoe brands, is refocusing on higher-margin boats like the Old Town Predator fishing kayak in a bid to win back specialty paddlesports dealers after years of supplying lower margin boats to big box retailers.