Vista Outdoor Inc. reported total sales grew 35 percent in the third quarter ended December 27. Shooting Sports segment sales jumped 41 percent while Outdoor Products Sales gained 24 percent. Net earnings on an adjusted basis surged five-fold.
Vista Outdoor’s brands include Federal Premium, CamelBak, Bushnell, Camp Chef, Primos, Blackhawk, Bell, and Giro.
“Continued strength in outdoor recreation markets, combined with our ongoing focus on execution excellence, resulted in strong top and bottom-line growth across the entire company,” said Vista Outdoor Chief Executive Officer Chris Metz. “Strong outdoor participation trends that began in the early days of COVID lockdowns have continued into calendar 2021 and do not appear to be slowing down. Our integration of the Remington brand is ahead of schedule and delivered better than expected performance in the quarter. This week we successfully completed a tuck-in acquisition of Hevi-Shot Ammunition, which will immediately add a high-end offering, specialized lead-free ammunition capabilities and another iconic brand to our ammunition portfolio. Looking ahead, our focus will remain on employee safety, compliance with COVID protocols and doing our part to fulfill our critical duties and outfitting our consumers for their next adventure.”
For The Third Quarter Ended December 27, 2020:
- Sales increased 35 percent to $575 million, compared with the prior-year quarter. Sales topped Wall Street’s consensus estimate of $520.13 million. Vista had guided sales in the range of $510 million to $530 million;
- Gross profit rose 84 percent to $163 million compared with the prior-year quarter. Gross profit margin improved by 750 bps compared with the prior-year quarter;
- Operating expenses were 16 percent of sales and improved by 11 bps when compared with the prior-year quarter. Adjusted operating expenses were 16 percent of sales and improved by 68 bps when compared with the prior-year quarter;
- Earnings before interest and taxes (EBIT) increased to $87 million from $19 million in the prior-year quarter. Adjusted EBIT increased to $73 million from $19 million in the prior-year quarter;
- Interest expense decreased 33 percent to $6 million, compared with the prior-year quarter. Adjusted interest expense decreased 25 percent compared with the prior-year quarter;
- Net earnings were $78.9 million, $1.31 a share, against $14.6 million, or 25 cents, in the prior-year quarter. Adjusted EPS was $62.1 million, or $1.03, compared with $12.4 million, or 21 cents, in the prior-year quarter. Wall Street’s consensus estimate had been 65 cents. Vista had guided earnings in the range of 55 cents to 65 cents; and
- Cash flow provided by operating activities was $307 million, compared with cash provided of $63 million in the prior-year period; and
- Free cash flow generation was $294 million, compared with a use of cash of $46 million in the prior year.
For The Third Quarter Ended December 27, 2020, Operating Segment Results
Shooting Sports
- Sales rose 41 percent to $402 million, compared with the prior-year quarter, driven by continued strong consumer demand due to resurgence in outdoor recreation activities and demand for personal protection;
- Gross profit increased 120 percent to $114 million, compared with the prior-year quarter. Margin acceleration was the result of cost savings initiatives, mix and price; and
- EBIT increased 189 percent to $73 million, compared with the prior-year quarter. EBIT margin improved by 927 bps to 18 percent from 9 percent in the prior-year quarter.
Outdoor Products
- Sales were up 24 percent to $173 million, compared with the prior-year quarter, driven by strong consumer demand resulting from the resurgence in outdoor recreation activities and higher sales in our e-commerce channels across all brands;
- Gross profit increased 35 percent to $50 million, compared with the prior-year quarter, due to improvements in mix and increases in the e-commerce channel across all brands. Gross profit margin was 29 percent, up 219 bps from the prior-year quarter; and
- EBIT increased 111 percent to $18 million, compared with the prior-year quarter. EBIT Margin improved by 437 bps to 11 percent from 6 percent in the prior-year quarter.
Outlook For Fiscal Year 2021 Fourth Quarter
“The growth of our free cash flow fuels our ability to accelerate our innovation pipeline and brand leadership, invest in our centers of excellence and generate growth through thoughtful, aligned tuck-in acquisitions,” said Sudhanshu Priyadarshi, CFO, Vista Outdoor. “We believe this approach strikes the right balance between profitable growth and fiscal discipline. Further, we intend to maintain a long term 1-to-2 times leverage ratio.”
Based on results to date, the current market environment and typical seasonality, Vista Outdoor’s outlook for fourth-quarter Fiscal Year 2021, which includes Remington and Hevi-Shot, is as follows:
- Sales in a range of $510 million to $530 million; and
- Earnings per share in a range of 55 cents to 65 cents.