Vista Outdoor saw its stock market price surge by 15 percent as it indicated that it plans to sell its much-contested and loss-making Savage firearms operations, likely before the planned disposal of its sports protection brands - Bell, Giro and Blackburn. Some major North American outdoor retailers said a few months ago that they had decided to stop ordering products from Vista because of its attachment to the gun business.
As previously reported, Vista announced last month an agreement to sell its eyewear business, consisting of the Bollé, Cébé and Serengeti brands, to an investment group for $158 million. The sale caused an impairment charge of $44.9 million for the group, contributing to a net loss of $52.3 million for the first fiscal quarter ended July 1, compared with net income of $16.6 million in the year-ago period. Total revenues were off by 7 percent to $528.8 million, due to mixed results in outdoor and an ongoing challenging market for guns and ammunition in the U.S.
In the outdoor segment, sales declined by 7 percent to $271 million. Vista said the unit enjoyed strong results at Camp Chef and with its golf rangefinders, but they were offset by soft results for Camelbak hydration products and in cycling, due to the delayed start of the spring season. It didn't mention the outdoor retailers' boycott.
Anyway, the overall results were better than expected, and the management indicated that it was on track with its transformation plan, although it expects a loss of about $38 million for the full financial year on sales of between $2.10 billion and $2.16 billion.
