Johnson Reports Watercraft Sales Down

In its first quarter ended December 29, Johnson Outdoors reported improved earnings and momentum in its Fishing and Diving segments, but ongoing struggles in Camping and Watercraft Recreation.

Helen Johnson-Leipold, chairman and CEO, told analysts that that during the first fiscal quarter, the company is ramping up for the primary selling period of its warm-weather outdoor recreation products across the second and third fiscal quarters. “Overall it was a good start to the fiscal year,” she said, adding overall sales in the quarter improved 24.4 percent to $116.6 million. “We are pleased by the performance in our Fishing and Diving brands.”

But gains in Fishing and Diving were offset by Camping and Watercraft. In the Camping segment, sales increased slightly to $5.85 million from $5.74 million. The operating loss was $724,000, versus $772,000 a year ago. Johnson-Leipold said the impact of retail bankruptcies and subsequent restructuring across the sporting goods channel hit camping categories early last year, driving tightened retail inventory controls that weighed down tent and gear year sales all season. Jetboil, she added, is holding steady against the market headwinds and “remains the number-one personal cooking system brand in the world.”

In the Watercraft Recreation segment, sales in the quarter slid 29.9 percent to $4.4 million from $6.2 million. The segment’s loss was $1.1 million against a loss of $798,000 a year ago. The segment includes Old Town canoes and kayaks, Ocean Kayak and Carlisle paddles.
Johnson-Leipold said tightened retail inventory controls began to affect the paddling markets late last year.

“Pre-season orders suggest retailers are anticipating continued market softness this year,” said Johnson-Leipold of the Water Recreation segment. “We got great brands, great innovation, unmatched expertise and are in a great position once the watercraft market rebounds. Right now, we’re moving quickly to strengthen operational efficiency to protect margins and reduce impact on profit.”

Added CFO David Johnson: “The impact on distribution channels from tough market conditions and watercraft recreation and camping further emphasizes the critical importance and urgency of” its digital transformation investments.

“The recreation in the water is not going away,” he added. “We are one of the global leaders in the space. I think what we’re seeing now is there is a disruption in the marketplace; not only [do] I think it’s soft market, but you’ve also got the trade and the channel evolution that is impacting. And we have to let that play out and hopefully we will be in the right position when things work themselves out and with the innovation we’ve got planned we feel very optimistic about the business.”

Total company operating profit for the first fiscal quarter was $7 million against $472,000 a year ago. Significantly higher sales volume, and margin expansion due to a favorable mix of new products sold, drove the favorable quarter-to-quarter comparison.

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