Vista Outdoor, Inc. reported that consolidated sales for the fiscal first quarter ended June 30 and decreased 7.1 percent year-over-year to $644 million. The decline was driven primarily by lower volume at The Kinetic Group (Ammo segment) and Revelyst (Outdoor segment), partially offset by increased government sales at Revelyst and the increased price at The Kinetic Group.

Revelyst sales declined 13.6 percent year-over-year to $274 million in the fiscal first quarter, reportedly driven by pre-order delivery timing delays, unfavorable product mix toward lower price-point channels, lower royalty revenues within Revelyst Adventure Sports, lower wholesale volume and order timing within Revelyst Outdoor Performance, lower volume due to new product introductions in the prior year for Bushnell Golf, and order timing within Revelyst Precision Sports Technology.

The decline was partially offset by increased government sales at Revelyst Outdoor Performance and growth at Foresight (Golf), driven by new product introductions at Revelyst Precision Sports Technology.

The Kinetic Group (TKG) saw sales decrease 1.6 percent to $370 million due to lower shipments across nearly all categories, partially offset by increased prices.

Consolidated gross profit decreased 6.9 percent year-over-year to $211 million, reportedly due to decreased volume and increased inflationary costs, including for copper and powder materials at TKG and lower volume at Revelyst, partially offset by increased prices at The Kinetic Group.

Revelyst gross profit decreased 14.2 percent year-over-year to $81 million in Q1, reportedly due to the reduction in sales partially offset by lower freight costs at Revelyst Adventure Sports, lower discounting at Revelyst Outdoor Performance and favorable product mix at Revelyst Precision Sports Technology.

TKG’s gross profit declined 1.6 percent to $130 million, driven primarily by decreased volume and increased input costs primarily for copper and powder, partially offset by increased price.

Consolidated operating expenses decreased 3.3 percent year-over-year, driven primarily by a gain on divestiture, lower transition costs for prior acquisitions and selling, general and administrative cost savings at Revelyst from its Gear Up initiative, partially offset by increased selling, general and administrative (SG&A) costs at TKG, increased planned separation costs, an asset impairment related to the sale of Fiber Energy, and Gear Up restructuring costs.

Consolidated operating income declined 12.1 percent year-over-year to $81 million, and operating income margin decreased 72 basis points to 12.6 percent of sales for the period. Consolidated Adjusted operating income was $86 million in forestal Q1, down 13.1 percent year-over-year. Adjusted operating income margin decreased 92 basis points to 13.3 percent of sales.

Revelyst operating income (loss) declined 123.8 percent year-over-year to a loss of $2 million, said to be due to lower gross profit at all three Revelyst segments, partially offset by decreased SG&A costs related to Gear Up initiatives. Segment operating income (loss) margin decreased 263 basis points year-over-year to negative 0.6 percent of sales in the period.

TKG operating income decreased 3.8 percent to $104 million due to lower gross profit and increased selling, general and administrative costs. Operating income margin decreased 62 basis points year-over-year to 28.2 percent.

Company Adjusted EBITDA declined 11.3 percent year-over-year to $110 million in Q1, and Adjusted EBITDA margin decreased 80 basis points to 17.1 percent. Revelyst’s Adjusted EBITDA decreased 35.2 percent to $16 million, and its adjusted EBITDA margin decreased 190 basis points to 5.7 percent. TKG Adjusted EBITDA decreased 3.2 percent to $111 million. Adjusted EBITDA margin decreased 49 basis points to 30.0 percent.

Consolidated net income decreased to $57 million, or 8.9 percent of sales, in the fiscal first quarter. Consolidated EPS was 97 cents per diluted share in Q1, down 2.0 percent compared with 99 cents in the prior-year Q1 period. Adjusted EPS declined to $1.01, or down 6.5 percent, in Q1, compared with $1.08 in the prior-year Q1 period.

Cash provided by operating activities was $54 million, compared to $74 million in the prior-year period. Adjusted free cash flow was $70 million.

Fiscal Year 2025 Outlook
“Our balance sheet remains strong, and we generated robust cash provided by operating activities of $54 million and adjusted free cash flow of $70 million, which drove a decrease in our net debt of $81 million during the quarter to $579 million and improved our net debt leverage ratio to 1.3x,” said Andrew Keegan, CFO of Vista Outdoor. “At Revelyst, we have been sharply focused on reducing inventory levels, and I am pleased with the progress our team has made, which has resulted in an approximately $100 million inventory reduction from the year prior and nearly $10 million sequentially from the prior quarter. These efforts continue to drive down our debt levels and contribute to maintaining our healthy balance sheet. At The Kinetic Group, the team remains steadfast on achieving our financial expectations while continuing to face competitive pricing and input cost headwinds, especially for copper and powder.

“Looking forward, we expect to see increased sales and sequential adjusted EBITDA momentum in the quarters ahead at Revelyst as a result of new and exciting product launches and partnership launches, including the collaboration with Guy Fieri. We have also seen tremendous progress with our GEAR Up transformation program, which contributed $5 million in realized cost savings in Q1 FY2025, providing a clear path to $25 million to $30 million of cost savings in FY2025. This progress gives us confidence in our expectation to double Revelyst standalone adjusted EBITDA during the year,” Keegan concluded.

Vista Outdoor has not reconciled adjusted EBITDA guidance (on a segment or consolidated basis) to GAAP net income guidance because Vista Outdoor does not provide guidance for net income, which is a reconciling item between GAAP net income and non-GAAP adjusted EBITDA. Accordingly, a reconciliation is not available without unreasonable effort.

Vista Outdoor has not reconciled adjusted effective tax rate guidance to GAAP effective tax rate guidance because Vista Outdoor does not provide guidance for income before income taxes, which is a reconciling item between GAAP effective tax rate and non-GAAP adjusted effective tax rate. Accordingly, a reconciliation to effective tax rate is not available without unreasonable effort.

The company reaffirmed its Fiscal Year 2025 guidance and expects:

  • Sales in the range of $2.665 billion to $2.775 billion
    • TKG Sales are expected to be approximately $1.425 billion to $1.475 billion.
    • Revelyst Sales are expected to be approximately $1.240 billion to $1.300 billion.
  • Adjusted EBITDA in the range of $410 million to $490 million
    • TKG adjusted EBITDA is expected to be approximately $350 million to $400 million.
    • Revelyst adjusted EBITDA is expected to be approximately $130 million to $160 million.
  • EPS in the range of $3.56 to $4.46; Adjusted EPS in the range of $3.60 to $4.50
  • Cash provided by operating activities in the range of $262 million to $343 million; adjusted Free Cash Flow in the range of $240 million to $320 million
  • Effective and adjusted tax rate of approximately 25.0 percent
  • Interest expense in the range of $30 million to $40 million
  • Capital expenditures as a percent of sales of approximately 1.5 percent

“The Board is committed to acting in the best interests of the company and its stockholders,” said Mike Callahan, chairman of the Board of Directors, Vista Outdoor, Inc. “We are continuing our engagement with both CSG and MNC and its private equity partner, as well as exploring a full range of alternatives for Revelyst and other strategic alternatives in order to maximize the value for stockholders. We remain as committed as ever on delivering the standard of excellence to our consumers that Vista Outdoor is known for while we continue to conduct our review to uncover the optimal outcome for our stockholders. The Board continues to recommend Vista Outdoor stockholders vote in favor of the proposal to adopt the merger agreement with CSG.”

“Revelyst made progress implementing our actionable standalone strategy to drive value creation in the first quarter amid continued market headwinds in certain segments. This gives us confidence in our full-year financial targets as we seek to show sequential quarter-over-quarter improvement throughout the year,“ said Eric Nyman, co-CEO of Vista Outdoor and CEO of Revelyst. “We continue to leverage our portfolio of category-defining Power Brands to win market share despite challenges related to market softness, order timing and divestitures. Specifically, at Simms, we hold a dominant position in waders and are gaining share in sportswear; at Bushnell Golf, we continue to set the standard with our leading position; and at Fox, Bell, Giro, and CamelBak, we are capturing share across numerous categories, including Helmets, Mountain Bike Protection and Bike Hydration despite a declining market environment.

“Across the enterprise, we are making good progress on our Gear Up transformation. The Gear Up transformation is working to simplify our business model, increase efficiency and expand strategic opportunities that allow us to reinvest in our highest potential brands. We expect more progress in the coming months. Looking ahead, we are excited to announce our biggest partnership ever, a collaboration between Revelyst, Camp Chef and Guy Fieri, which unites the Mayor of Flavortown himself with the leading innovator in outdoor cooking gear. Fieri has long served as an unofficial brand ambassador while using the brand’s products on screen, on stage and at home. This multi-year partnership will include several collaborations between Fieri and Camp Chef and will include a number of co-branded cooking equipment pieces. Be on the lookout for more news on this category-defining announcement on August 19 across Revelyst’s social channels and CampChef.com,“ Nyman concluded.

“The Kinetic Group delivered a strong start to the year, reporting sales in line with expectations and profitability ahead of expectations,“ said Jason Vanderbrink, co-CEO of Vista Outdoor and CEO of The Kinetic Group. “The team continues to navigate a dynamic environment, including a global powder shortage, increasing input costs, including for copper and powder, and competitive market pricing, with a continued focus on execution and delivering on our financial expectations. As our history shows from TKG, we are laser-focused on operational excellence and never resting on our laurels in every aspect of our business. As we enter the election season, we are focused on controlling matters we can control and continuing to drive value for our stockholders and other stakeholders. As we continue FY2025, the company has, without question, the most innovative product launch coming in our long history of game-changing technologies.”

Image courtesy Vista Outdoor/Camp Chef