Sales at Jarden Corporation’s Outdoor Solutions division fell by 10 percent to $637.8 million for the second quarter, with operating income down by 8.7 percent to $68.3 million. The integration of Shakespeare and Pure Fishing is nearly completed, and the company is currently trimming the staff at 25 order fulfillment and back order offices in Europe by 40 percent.
Lower gas prices and higher unemployment rates helped generate additional volumes of fishing tackle sales during the three months. At Coleman, tents and sleeping bags had strong results in the period as the brand benefitted from 10 percent growth in U.S. camping permits and the “staycation” trend. At Rawlings, volumes grew for baseballs and value-priced products, but shrank for premium-priced items.
For the whole company, sales fell by 6.6 percent to $1,269.7 million, with a little over half of the decline attributable to currency exchange rates. It had a 4.4 percent increase in net income to $44.9 million. The gross margin inched up by 0.1 percentage point to 28.1 percent. Jarden said its focus on managing its working capital led to improvements in inventory, receivables and payables during the period despite the lower sales. Management said the majority of de-stocking by retailers has passed and re-ordering should begin in earnest again in 2010.
The group, which generated $230 million in cash flow during the quarter, says it has no major acquisition possibilities in the pipeline at this time.
Looking at the ski business, Jarden's management sees the category down by 20 percent for the upcoming 2009-10 season, but adds that its K2 ski business will be down “significantly less than that” and not in the double-digit range.
