Vista Outdoor reported earnings increased more than three-fold in its first fiscal quarter ended June 27 as sales increased 38 percent.
Vista Outdoor’s brands include Federal Premium, CamelBak, Bushnell, Camp Chef, Remington, Primos, Blackhawk, Bell, Giro, Bushnell Golf, Primos, Eagle, RCBS, CCI, Hevi-Shot, and Speer.
“Fiscal year 2022 is off to a terrific start with our fourth consecutive quarter of record performance due to strong demand, great execution and a powerhouse line up of innovative outdoor products,” said Vista Outdoor CEO Chris Metz. “The credit goes to our team who continues to tirelessly work towards being one of the industry’s most admired companies while consistently delivering great shareholder returns.
“We are successfully executing on our value creation framework and deploying the levers of organic growth, innovation and select acquisitions. We are driving organic growth through new product development across our family of brands. We increased R&D investment by 17 percent to accelerate the pipeline of innovative gear in high demand as more consumers are recreating outdoors. We entered the golf simulation market through an exclusive domestic partnership with Foresight Sports, the leader in golf launch monitor technology and can’t wait to introduce our new Launch Pro this Fall. And we closed and integrated two exciting acquisitions in high growth segments playing to key market trends. The premium e-bike brand QuietKat and the female hunt-inspired apparel brand, Venor, joined the Vista Outdoor family of brands during the first quarter,” concluded Metz.
For the three months ended June 27, 2021 versus the three months ended June 28, 2020:
- Sales increased 38 percent to $663 million;
- Gross profit rose 93 percent to $241 million and gross profit margin improved by 1025 bps;
- Operating expenses were 15 percent of sales and improved by 139 bps. Adjusted operating expenses were 15 percent of sales and improved by 163 bps;
- Earnings before interest and taxes (EBIT) increased to $144 million from $48 million. Adjusted EBIT increased to $146 million from $48 million;
- Interest expense decreased 12 percent to $6 million;
- Fully Diluted Earnings per Share (EPS) were $1.71, compared with $0.69. Adjusted EPS was $1.74, compared with $0.51; and
- Cash flow provided by operating activities was $29 million compared with cash provided of $77 million. Free cash flow generation was $36 million, compared with $73 million.
In May, when reporting fourth-quarter results, Vista Outdoor had projected sales in a range of $600 million to $620 million. EPS was projected in a range of 80 to 90 cents.
For the three months ended June 27, 2021, operating segment results versus the three months ended June 28, 2020:
- Sales rose 39 percent to $463 million, driven by a 39 percent growth in ammunition and 37 percent growth in our hunting and shooting category.
- Gross profit increased 115 percent to $181 million. Margin acceleration was the result of operating leverage, mix and price.
- EBIT increased 160 percent to $142 million. EBIT Margin improved by 1426 bps to 31 percent from 16 percent.
- Sales were up 38 percent to $200 million, driven by strong double-digit growth across all categories.
- Gross profit increased 48 percent to $61 million, due to higher volume and higher-margin product mix, partially offset by higher logistics costs. Gross profit margin was 30.3 percent, up 212 bps.
- EBIT increased 125 percent to $26 million. EBIT Margin improved by 505 bps to 13 percent from 8 percent.
Outlook for Fiscal Year 2022 Second Quarter
“Our first-quarter results exceeded our expectations in terms of sales and profit growth across both segments,” said Sudhanshu Priyadarshi, CFO, Vista Outdoor. “Sales increased 38 percent, and we drove record profitability in the first quarter with adjusted EBITDA margins of 24.4 percent. As part of our disciplined capital allocation strategy, we repurchased 1.2 million shares. With strong performance and a low leverage ratio of 0.7 times, we have significant financial flexibility to continue to invest in the future growth of our brands and make strategic acquisitions in the outdoor space.
“Vista Outdoor is well-positioned to enhance stakeholder value. Our financial strength, portfolio of leading brands and favorable consumer trends position Vista Outdoor incredibly well for the long term,” concluded Priyadarshi.
Based on results to date and the current market environment, Vista Outdoor’s outlook for the second quarter Fiscal Year 2022 is as follows, which includes the recent acquisitions of QuietKat, Venor, HEVI-Shot and Remington:
- Sales in a range of $710 million to $730 million, compared with $575 million in the prior-year quarter.
- Earnings per share in a range of $1.70 to $1.80 compared with $1.10 of adjusted EPS in the prior-year quarter.
Vista Outdoor is updating the following assumptions for Fiscal Year 2022 on a full-year basis:
- Tax rate is expected to be in the mid 20 percent range;
- Interest expense is expected to be in line with the prior-year adjusted interest expense;
- Capital expenditures are expected to be approximately 30 percent higher than FY21; and
- R&D expenses are expected to be approximately 25 percent higher than FY21.
Photo courtesy QuietKat