Vista Outdoor Inc.’s sales grew 40 percent in the fourth quarter ended March 31 with robust growth across its Outdoor Products and Shooting Sports segment. Management also forecasted continued robust gains for the first quarter as it saw no slowdown in demand.
“The pandemic accelerated many of the consumer trends that were already in motion and that we believe will help fuel our continued success and FYI 22 and beyond,” said Vista Outdoor CEO Chris Metz.
For example, he noted that there were 8.4 million new entrants into shooting sports in 2020, and this pace has not slowed in 2021. Hunting licenses grew 8 percent in 2020, bringing in over a million new hunters. Said Metz, “In fact, 38.9 million hunters is the highest level on record dating back to 1958. This trend in 2020 is a reversal from the prior decade-long decline in hunting participation and points to people embracing the field-to-table movement.“
Meanwhile, domestic bike sales climbed 65 percent in 2020, and electric bike sales grew 145 percent despite shortages at many bike retailers.
Domestic golf rounds were up 45 percent for the month of March and up 24 percent for the first quarter. Finally, the Outdoor Industry Association reported overall outdoor participation growing among women, younger consumers, urban, and ethnically diverse consumers.
At Vista, demand for its Outdoor Products segment continued to accelerate as the company moved through the year. Said Metz, “We believe we outperformed many of our peers.”
Overall sales in the quarter grew to $596.5 million from $426.3 million a year ago. Results topped Wall Street’s consensus estimate of $525.9 million.
Net earnings came to $67.0 million, or $1.11 a share, rebounding from a loss of $141.2 million, or $2.44, a year ago. Adjusted EPS was $1.02, compared to 11 cents, in the prior fiscal year period. Results were well ahead of Wall Street’s consensus estimate of 66 cents.
Gross margins jumped more than 1,000 basis points compared with the prior-year quarter, driven by volume, favorable pricing and mix, operating leverage, and strong growth in e-commerce channels.
Operating expenses were $102 million, compared with $232 million in the prior-year quarter, primarily due to goodwill and indefinite-lived intangible asset impairment charge of $156 million in the prior-year quarter.
EBIT came to $74 million against a loss of $147 million in the prior year’s quarter. Adjusted EBIT was $81 million, compared with $11.1 million in the prior-year quarter.
For the year, sales increased 27 percent to $2.23 billion. EPS increased to $4.44, compared with a loss of $2.68 in the prior fiscal year. Adjusted EPS was $3.66, compared with 24 cents in the prior fiscal year, due to higher sales, gross margin expansion, operating leverage, and a lower tax rate.
“We delivered all-time record results for earnings per share, EBIT, and free cash flow as a result of our successful multi-year effort to strengthen our operations and improve profitability,” said Vista Outdoor CEO Chris Metz.
Outdoor Products’ Q4 Revenue Jumps 47 Percent
In the Outdoor Products segment, sales increased 47 percent to $193 million, primarily due to strong consumer demand across all brands. Brands in the segment include CamelBak, Bushnell Golf, Camp Chef, Blackburn, Bell and Giro.
Gross margin improved 651 basis points to 31 percent, driven by operating leverage and growth in e-commerce channels, partially offset by increased distribution and freight cost. EBIT expanded to $25 million, compared with $4 million in the prior-year quarter.
For the year, sales of Outdoor Products increased 25 percent to $707 million from the prior fiscal year primarily due to strong consumer demand as a result of the resurgence in outdoor recreation activities and higher sales in its e-commerce channels across all brands. Strong demand was somewhat offset by continued supply chain disruptions primarily related to our Hydration business unit.
Gross margin increased by 289 basis points to 29 percent compared with the prior fiscal year driven by volume, operating leverage, and growth in e-commerce channels. EBIT improved to $82 million, compared with $30 million in the prior fiscal year.
Addressing progress by brands in the Outdoor Products segment, Metz said CamelBak delivered an impressive fourth quarter of double-digit growth, driven by the drinkware line and a rebound in its international business, which increased over 100 percent compared with the prior-year quarter.
He said, “When it comes to sustainable new product development, Camelback is leading the industry. The team recently launched Repurpose, a sustainability initiative designed to reduce climate and environmental impact through improved product design, sourcing and operational efficiencies.”
Bushnell Golf business “also had an incredible year,” extending the brand’s status leading laser rangefinders in golf with the introduction of the Tour V5 and Tour V5 Shift. The highlight of the year was the introduction of Wingman, the golf industry’s first GPS-enabled speaker. The Wingman exceeded all expectations and, within 12 months, became the top-selling GPS product in the industry.
Camp Chef “continues to knock the ball out of the park” with another year of double-digit sales growth, driven by strong DTC growth. Among launches, the Camp Chef Woodwind WiFi Pellet Grill exceeded expectations in the market and now comes in three different sizes. Wi-Fi-enabled product is producing valuable consumer data and insights through the integration with a Camp Chef app, which is helping Camp Chef fine-tune digital marketing and product development moving forward.
Providing an update on cycling products, Rick Kern, president of Bell + Giro, said Bell and Giro “delivered a stellar fourth quarter and outstanding full-year results.” Sales increased double-digit on both the fourth quarter and year, driven by new product launches and market share gains.
Gross margin at the Bell + Giro unit expanded at historical levels, and disciplined financial management drove operational efficiencies and improved profitability of the SKU level. Kern said that while the cycling businesses benefited from the pandemic trends, brands are also taking share in key areas.
Blackburn has partnered with Walmart on an exclusive product line across ten categories, including pumps, lights, blocks, and tools. Kern said, “This partnership expands our profitable accessories line while also creating a more diverse generation of users with an affinity for the Blackburn brand.”
Giro has been expanding its share in helmets and footwear on strong innovation and sales. This year, Giro is launching a new line of urban helmets and flat pedal shoes to tap into the rapidly-growing e-bike market. Opportunities internationally in snow and cycling are expected to come from the Olympic Games in Asia.
Bell has found strong press coverage from the limited-edition launch of its Moto-10 Spherical helmet for power sports. Said Kern, “The helmet sold out in less than three days. The full rollout will take place later in the summer.”
Shooting Sports Q4 Sales Climb 37 Percent
Sales in the Shooting Sports segment increased 37 percent to $403 million compared with the prior-year quarter, primarily driven by strong demand for commercial ammunition and hunting and shooting accessories. Brands in the segment include Federal Premium, Primos, Bushnell, Speer, and Blackhawk. The fourth quarter represented the first full quarter of ownership of the Remington acquisition of ammunition operations, brand and certain IP.
Gross margin significantly improved to 31 percent, up from 18 percent compared with the prior-year quarter, primarily driven by volume and pricing improvement, favorable mix and operating leverage. EBIT increased nearly four-fold to $82 million, compared with $22 million in the prior-year quarter.
Sales in the year increased 28 percent to $1.52 billion, primarily due to strong consumer demand due to the resurgence in outdoor recreation activities, demand for personal protection and higher sales in its e-commerce channels across all brands. The Remington and Hevi-Shot acquisitions during the fiscal year contributed to higher sales growth.
Gross margin in the year of 1,037 basis points to 28 percent, primarily driven by volume, pricing improvement, mix, and operating leverage, was offset by increased commodity costs. EBIT improved over three times to $279 million, compared with $80 million in the prior fiscal year.
“The ammunition team delivered incredible results for the fourth quarter and the entirety of fiscal 2021,” said Metz. “Our sales and operation teams across every location deserve great credit, as they worked overtime to keep pace with demand.”
He said the Remington and Heaviside integrations remain ahead of schedule.
“The strength of the commercial market has continued into calendar 2021. In fact, demand has increased each quarter of the fiscal year, resulting in the highest current backlog in our company’s history,” said Metz. “Low channel inventories, combined with heightened consumer demand, continue to pressure supply. Our new and existing facilities are working 24/7 to deliver more products to the marketplace and reduce our growing sales backlog.
Leveraging its commercial strengths, the Shooting Sports segment secured major contracts with law enforcement and military agencies, including the FBI and U.S. Army with Federal Premium and Department of Homeland Security with Speer.
Vista’s Hunt/Shoot team delivered double-digit sales growth for the year and quarter, strengthened by consumer trends, a much larger base of users, strong new products and its optics repositioning strategy, which created better margins and higher sales.
Among new products, the Blackhawk team successfully launched the upgraded Blackhawk T-Series holster that drove record sales for the month of March. A strong reception to the Bushnell Prime 1700 rangefinder helped bring Bushnell back into the leading market share position in the hunting laser rangefinder market.
For the current first quarter, Vista expects sales in a range of $600 million to $620 million, compared with $479 million in the prior-year quarter and EPS in a range of 80 cents to 90 cents, compared with 51 cents in the prior-year quarter.
Said Metz, “2021 promises to be a year where people continue to recreate and enjoy the outdoors. We enter this year with our highest level of cash flow, our lowest level of debt in years, a powerhouse of outdoor brands, an expanded addressable market, record numbers of passionate advocates for our products, and an expanded commitment to preserve and protect our planet as we bring people outside.”
Photo courtesy Remington