Johnson Outdoors recorded strong gains in revenues and profits in all its divisions except Watercrafts for its first fiscal quarter, ended on Dec. 27, 2019. The company’s net income jumped by a staggering 83 percent from the year-ago period to $6.4 million.
The group’s total revenues soared by 23 percent to $128.1 million. However, the company benefited from a favorable comparison base with the year-ago quarter, when the group’s important Fishing segment was hampered by a delay in the availability of new products.
As before, the management also attributed this performance to ongoing investments in richer consumer insights, targeted innovation and accelerated digital sophistication.
The Diving segment, which the group is trying to strengthen, expanded by 6 percent to $16.5 million. Its operating profit reached $0.2 million, against a loss of $0.7 million in the same period a year earlier. The management said this segment is the most global in the company, with sales in Europe driving most of the growth in the quarter.
Positive trends in retail and e-commerce in North America have been driven by efforts on digital marketing, and the group is trying to replicate this in Europe, with new websites on track to launch this year. New core life-support products did particularly well, with sales from the ScubaPro brand increasing by 8 percent on a constant currency basis.
Revenues from the Fishing segment gained 26 percent to $99.3 million, mainly due to last year’s delay in new product availability, while the operating income gained 31 percent to $15.0 million. Humminbird’s latest innovation, the Mega 360 Imaging, began shipping in the first quarter and the management said that the customers’ response has been favorable so far. This sonar option provides a high-resolution 360-degree view.
The Camping division, which includes brands such as Jetboil and Eureka, saw sales improve by 29 percent to $7.5 million. Here, the operating income was $66,000, compared with a loss of $686,000 for the same quarter last year. Demand for Eureka’s Ignite Camp Stove remained solid, while the Jetboil brand, the technology leader in portable outdoor cooking systems, continued to grow.
Watercraft sales progressed by 11 percent to $4.8 million, helped by new products. However, its operating loss expanded by 5 percent to $1.5 million.
Overall, Johnson Outdoors’ gross margin declined by 0.60 percentage points to 41.9 percent, due primarily to higher tariffs on products imported from China into the U.S.
Noting that first-quarter results are not predictive of the full year, the management continues to expect moderate sales growth for the full fiscal year. As a result of recent developments in trade negotiations between the U.S. and China, as well as its own cost mitigation efforts through higher prices, it now expects the impact of tariffs on Chinese goods and components to be approximately $4 - $5 million on profits in fiscal 2020.