Sales of outdoor and diving products at Johnson Outdoors dropped significantly in the first quarter until Jan. 2, but the company attributed most of the decline to a shift in orders as retailers adjusted their inventory management. The first quarter of Johnson's fiscal year is seasonally slow for the company, which stands by its guidance that profits will expand faster than sales this year.
Sales in Johnson Outdoors' outdoor equipment division, comprising the Eureka, Jetboil and Silva brands, dipped by 23.9 percent to just $6.4 million for the quarter. The diving division, with the ScubaPro brand, saw its turnover drop by 10.4 percent to $15.5 million as the European market remained weak.
The turnover of the entire group, which further includes the marine electronics and watercraft divisions, was down by 10.5 percent to $70.8 million and by 8.9 percent in constant currencies. The group's gross margin inched up by 0.8 percentage points to 38.6 percent, but Johnson suffered an operating loss of $7.3 million for the quarter, compared with an operating loss of $2.9 million for the same period a year ago. It ended the three months with a net loss of $4.2 million, against a loss of $2.2 million.
Apart from the dropping sales, Johnson Outdoors had to deal with an increase of $2.5 million in legal costs relating to its patent infringement lawsuit against Garmin International. The company indicates that it may have to spend another $2.5 million to litigate the case in the current quarter.
The outdoor division widened its operating loss to $0.34 million for the quarter, compared with $0.19 million. The diving division, which had still managed a small operating profit of $0.15 in the first quarter of 2014, suffered a loss of $0.34 million for the same period of the current financial year.
