Johnson Outdoors reports 2023 fiscal first quarter results

Johnson Outdoors Inc © Johnson Outdoors Inc

Johnson Outdoors Inc. (Nasdaq:JOUT), a leading global innovator of outdoor recreation equipment and technology, today announced higher sales and decreased earnings results for the Company's first fiscal quarter ending December 30, 2022.

"We saw positive momentum in our Fishing business as supply constraints continued to ease and we worked hard to fill customer orders. In our Camping and Watercraft Recreation businesses, we are experiencing some softening in the market after the pandemic-fueled increase in demand of the last few years. While it's too early to predict how the fiscal year will go, we are monitoring consumer buying behavior and are focused on filling customer orders as we enter into the primary selling season," said Helen Johnson-Leipold, Chairman and Chief Executive Officer.

First quarter result

Total Company net sales in the first quarter increased 16 percent to $178.3 million compared to $153.5 million in the prior year first fiscal quarter. Key contributing factors include:

• Fishing sales increased by 27 percent, driven primarily by improved supply and component availability and price increases
• Camping revenue declined 18 percent, as consumer demand declined from increased levels seen during the pandemic
• Watercraft Recreation revenue declined 34 percent, also driven by reductions in consumer demand from the elevated levels seen during the pandemic
• As destination travel has rebounded, Diving sales rose 16 percent along with the increase in tourism

Total Company operating profit was $5.5 million for the first fiscal quarter versus $13.8 million in the prior year first quarter. Gross margin was 35.2 percent, compared to 39.5 percent in the prior year quarter. The decline was due to increased cost of sales due to high material and freight costs in inventory. Operating expenses of $57.3 million increased $10.4 million from the prior year period due primarily to the impact of higher sales volume-driven expenses, as well as higher compensation, health insurance and professional services costs between quarters.

Net income was $5.9 million, or $0.57 per diluted share, versus $10.9 million, or $1.07 per diluted share in the previous year's first quarter. The effective tax rate was 28.0 percent compared to 25.6 percent in the prior year first quarter.

Other financial information

The Company reported cash and short-term investments of $103.4 million as of December 30, 2022. Depreciation and amortization were $3.8 million in the three months ending December 30, 2022, compared to $3.5 million in the prior three-month period. Capital spending totaled $6.6 million in the current year-to-date period compared with $6.2 million in the prior year period. In December 2022, the Company's Board of Directors approved a quarterly cash dividend to shareholders of record as of January 12, 2023, which was payable January 26, 2023.

"While we've seen improvement in some supply availability, gross margins continue to be negatively impacted by high costs in inventory from supply chain disruptions and inflationary pricing conditions. We remain focused on monitoring demand and managing higher-than-normal inventory levels. Our balance sheet however, remains debt-free and our healthy cash position continues to provide us with the flexibility and resources necessary to invest in strategic opportunities to strengthen the business and consistently pay dividends to shareholders," said David W. Johnson, Chief Financial Officer.

Webcast

The Company will host a conference call and audio web cast at 11:00 a.m. Eastern Time on Friday, February 3, 2023. A live listen-only web cast of the conference call may be accessed at Johnson Outdoors' home page or here. A replay of the call will be available for 30 days on the Internet.