JOHNSON OUTDOORS INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 28, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission file number 0-16255 (Exact name of Registrant as specified in its charter) Wisconsin 39-1536083 (State or other j ...

Johnson Outdoors (JOUT) Q2 2025 Earnings Call May 02, 2025 11:00 AM ET Company Participants Patricia Penman - Vice President of Marketing Services & Global CommunicationHelen Johnson-Leipold - Chairman & CEODavid Johnson - CFO & VP Conference Call Participants Anthony Lebiedzinski - Senior Equity Research Analyst Operator Hello, everyone, and welcome to the Johnson Outdoors Second Quarter twenty twenty five Earnings Conference Call. Today's call will be led by Helen Johnson Leopold, Johnson Outdoors' Chairm ...

Financial Data and Key Metrics Changes - Gross margin in the second quarter was 35%, slightly up from the previous year's quarter, supported by cost savings efforts despite ongoing pricing discounting in the marketplace [11] - Operating expenses decreased by $7.7 million compared to the prior year’s second quarter, with a $4.3 million decline attributed to lower volume-related expenses and decreased promotion expenses [11] - Inventory balance as of March was $180 million, down approximately $69 million from last year's second quarter and decreased from the fiscal year-end [12] Business Line Data and Key Metrics Changes - The fishing business saw positive results from new product launches, including the Humminbird brand's new technology, which exceeded demand expectations [5] - In the camping and watercraft segment, the Jetboil brand launched new fastboil systems, with orders outpacing expectations [6] - The Old Town brand launched five new watercraft additions, expanding its popular Sportsman line and entering new recreational categories [7] - The diving business continues to face challenges due to global economic uncertainties and consumer travel, prompting a focus on operational efficiencies [8] Market Data and Key Metrics Changes - The overall market environment remains challenging, with cautious retail and trade conditions impacting sales [5][26] - Sales were reported to be down approximately 4% year-over-year, with consistent tough market conditions noted throughout the quarter [18][26] Company Strategy and Development Direction - The company is focused on innovation as a strategic priority, with ongoing investments in new product development across various business lines [5][16] - Strategies to mitigate tariff impacts include adjusting supply chain strategies, seeking operational efficiencies, and considering pricing adjustments [9][32] - The company maintains a debt-free balance sheet and solid cash position, which are viewed as competitive advantages in uncertain times [10][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the continued market challenges and emphasized the importance of innovation and operational efficiency for future growth [5][10] - The management expressed confidence in the ability to navigate current challenges and create long-term value for shareholders [13] Other Important Information - The company has acquired a supplier for its ScubaPro brand, which is expected to drive future innovation and enhance operational efficiency [8] Q&A Session Summary Question: Pipeline for new products - Management indicated that new products for fishing and camping have been launched and are exceeding expectations, with ongoing efforts in long-term innovation [15][16] Question: Trends during the quarter - Management noted a consistent tough environment, with no significant changes in consumer sentiment or retailer hesitation throughout the quarter [26] Question: Impact of tariffs on ordering patterns - Initial retailer reactions to tariffs have not shown a significant pullback, but the marketplace is expected to remain challenged for the rest of the season [29] Question: Exposure to China and response to tariffs - The company imports a fair amount of products from China and Southeast Asia, and is actively working on mitigation strategies to address tariff impacts [32][33] Question: Magnitude of gross margin impacts - Cost savings are expected to provide a benefit of one to two points to gross margin, with ongoing efforts to expand these savings [34][35] Question: Unusually high tax rate in the quarter - The high tax rate was attributed to income and expense in different jurisdictions and an accrual from tax audits in Europe, which is considered a one-time event [38]

Financial Performance - Total Company net sales in the second quarter declined 4 percent to $168.3 million compared to $175.9 million in the prior year second fiscal quarter [3] - Total Company operating profit was $4.9 million for the second fiscal quarter versus an operating loss of $(0.25) million in the prior year second quarter [4] - Net income was $2.3 million, or $0.22 per diluted share, compared to $2.2 million, or $0.21 per diluted share in the previous year's second quarter [5] - Fiscal 2025 year-to-date net sales were $276.0 million, a 12.2 percent decrease over last year's first fiscal six-month period [6] Revenue Breakdown - Fishing revenue decreased 3 percent due to continued market and macroeconomic dynamics affecting consumers [8] - Camping & Watercraft Recreation sales were down 12 percent, with growth in Jetboil partially offsetting declines in watercraft [8] Expenses and Investments - Operating expenses decreased by $7.7 million from the prior year period to $54.0 million [4] - The Company reported cash and short-term investments of $94.0 million as of March 28, 2025 [9] Tax and Tariff Impacts - The effective tax rate was 44.6 percent compared to 28.4 percent in the prior year second quarter [5] - The Company is working on multiple paths to mitigate tariff impacts despite being an American company with U.S.-based manufacturing [2]

Group 1: Earnings Performance - Johnson Outdoor reported quarterly earnings of $0.22 per share, exceeding the Zacks Consensus Estimate of $0.21 per share, and showing an increase from $0.21 per share a year ago, representing an earnings surprise of 4.76% [1] - The company posted revenues of $168.35 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.18%, but down from $175.86 million in the same quarter last year [2] - Over the last four quarters, Johnson Outdoor has surpassed consensus EPS estimates only once [2] Group 2: Stock Performance and Outlook - Johnson Outdoor shares have declined approximately 28.1% since the beginning of the year, compared to a decline of 4.7% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $0.14 on revenues of $180.19 million, and for the current fiscal year, it is -$1.60 on revenues of $580.85 million [7] - The estimate revisions trend for Johnson Outdoor is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Group 3: Industry Context - The Leisure and Recreation Products industry, to which Johnson Outdoor belongs, is currently ranked in the bottom 15% of over 250 Zacks industries, suggesting a challenging environment for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment and stock performance [5]

Core Viewpoint - Johnson Outdoors Inc. reported a decline in net sales for the second fiscal quarter, reflecting ongoing market challenges, but noted positive results from new product lines, emphasizing the importance of innovation and strategic focus to navigate economic uncertainties [2][3]. Financial Results - Total net sales for the second quarter decreased by 4% to $168.3 million from $175.9 million in the prior year [3]. - Operating profit for the second quarter was $4.9 million, compared to an operating loss of $(0.25) million in the same quarter last year [4]. - Gross margin remained relatively stable at 35.0%, slightly up from 34.9% in the prior year [4]. - Operating expenses decreased by $7.7 million to $54.0 million, attributed to lower sales volumes and reduced promotional expenses [4]. Year-to-Date Results - Year-to-date net sales for fiscal 2025 were $276.0 million, a 12.2% decrease compared to the same period last year [6]. - The company reported an operating loss of $(15.3) million year-to-date, worsening from $(0.2) million in the previous year [6]. - Gross margin for the year-to-date period decreased to 33.0% from 36.3% in the prior year [6]. Profitability Metrics - Profit before income taxes for the second quarter was $4.2 million, up from $3.0 million in the prior year [5]. - Net income for the second quarter was $2.3 million, or $0.22 per diluted share, compared to $2.2 million, or $0.21 per diluted share in the previous year [5]. - The effective tax rate increased to 44.6% from 28.4% in the prior year [5]. Segment Performance - Fishing segment sales decreased by 3% to $134.9 million, while Camping & Watercraft Recreation sales fell by 12% to $17.9 million [8][16]. - Diving sales decreased by 7% to $15.8 million, primarily due to softening market demand [8][16]. Cash and Investments - As of March 28, 2025, the company reported cash and short-term investments of $94.0 million [8]. - Capital spending for the current six-month period was $7.4 million, compared to $10.2 million in the prior year [9]. Strategic Focus - The company is actively working on strategies to mitigate the impact of tariffs on its operations, despite being a U.S.-based manufacturer [2][10]. - Johnson Outdoors continues to manage inventory levels and maintain a healthy cash balance while navigating macroeconomic challenges [10].

Company Overview - Johnson Outdoors Inc. is a leading global innovator in outdoor recreation equipment and technology, focusing on inspiring people to experience the outdoors [3] - The company designs, manufactures, and markets a diverse portfolio of consumer-preferred brands across four categories: Watercraft Recreation, Fishing, Diving, and Camping [3] - Iconic brands under Johnson Outdoors include Old Town canoes and kayaks, Carlisle paddles, Minn Kota trolling motors, Cannon downriggers, Humminbird marine electronics, SCUBAPRO dive equipment, and Jetboil outdoor cooking systems [3] Upcoming Financial Results - Johnson Outdoors will release its financial results for the Fiscal 2025 second quarter on May 2, 2025, before the market opens [1] - A conference call and audio webcast will be held on the same day at 11:00 a.m. Eastern Time to discuss the financial results and provide a company update [1][2] - A live listen-only webcast of the conference call will be accessible on the company's homepage, with a replay available for 30 days in the Investor section [2]

Core Viewpoint - The article emphasizes the importance of consulting qualified investment advisors before making any investment decisions, highlighting that the opinions expressed are not investment recommendations [2][3]. Group 1 - The author has no stock, option, or similar derivative positions in any of the companies mentioned, nor plans to initiate any such positions within the next 72 hours [1]. - The article is intended for informational purposes only and does not constitute an investment research report [2]. - The opinions expressed are based on incomplete information and are subject to change without notice [2][3]. Group 2 - Seeking Alpha clarifies that past performance is not indicative of future results and that no recommendations are being made regarding the suitability of investments for particular investors [3]. - The views expressed may not reflect those of Seeking Alpha as a whole, and the analysts may not be licensed or certified by any regulatory body [3].

Core Insights - Johnson Outdoors Inc. (JOUT) reported mixed results for Q1 fiscal 2025, with a wider quarterly loss than expected and a decline in year-over-year sales despite surpassing net sales consensus [1][4] Financial Performance - The company incurred a quarterly loss per share of $1.49, exceeding the Zacks Consensus Estimate of a loss of $1.30, compared to earnings of $0.38 in the prior-year quarter [4] - Net sales reached $107.6 million, surpassing the consensus mark of $105 million by 2.8%, but reflecting a 22% decline year over year [4] Segment Analysis - **Fishing Segment**: Net sales fell 25% year over year to $82.5 million, resulting in an operating loss of $8.3 million compared to an operating profit of $11.5 million in the previous year [5] - **Camping & Watercraft Recreation**: This segment's net sales decreased to $9.5 million from $10.7 million, with an operating loss of $0.6 million, an improvement from a loss of $1.7 million in the prior year [6] - **Diving Segment**: Net sales declined by 10% to $15.7 million, with an operating loss of $0.9 million compared to a loss of $0.6 million in the previous year [7] Operating Highlights - Gross profit decreased to $32.2 million from $52.9 million year over year, with gross margin contracting by 820 basis points to 29.9% due to lower sales volumes and unfavorable product mix [8] - Operating expenses were $52.4 million, slightly down from $52.8 million reported a year ago, leading to an operating loss of $20.2 million compared to a profit of $0.05 million in the prior year [9][10] Balance Sheet Overview - As of December 27, 2024, cash and cash equivalents were $95.3 million, down from $145.5 million at the end of fiscal 2024, while inventories decreased to $201.6 million from $209.8 million [11]

Financial Performance - Net sales for the first quarter of fiscal 2025 were $107,649, a decrease of $30,995, or 22%, compared to $138,644 for the same period in the prior year[129]. - The Fishing segment reported net sales of $82,472, down $28,020, or 25%, from $110,492 in the prior year quarter[137]. - The Diving segment's net sales were $15,684, a decline of $1,794, or 10%, compared to $17,478 in the same quarter last year[140]. - The Company reported a net loss of $15,290, or $1.49 per diluted share, compared to net income of $3,955, or $0.38 per diluted share, in the prior year[151]. - Operating loss for the quarter was $20,239, compared to an operating profit of $46 in the first quarter of the prior fiscal year[144]. Profitability and Margins - Gross profit margin for the first quarter was 29.9%, down from 38.1% in the prior year, primarily due to unfavorable overhead absorption and changes in product mix[142]. Cash Flow and Liquidity - Cash and cash equivalents totaled $101,617 as of December 27, 2024, down from $109,555 as of December 29, 2023[152]. - Cash used in operating activities was $(36,909) for the quarter, compared to $(33,687) in the same period last year[154]. - Cash used for operations totaled $36,909 for the three months ended December 27, 2024, compared to $33,687 in the prior year, reflecting a decrease in income due to lower sales volumes[155]. - Cash used for investing activities was $6,500 for the three months ended December 27, 2024, compared to cash provided of $4,685 in the prior year, primarily due to $12,180 paid to acquire a business[156]. - Cash used for financing activities totaled $3,450 for the three months ended December 27, 2024, compared to $3,588 in the prior year, primarily for dividend payments and treasury stock purchases[157]. - The company held approximately $58,043 in cash, cash equivalents, and short-term investments as of December 27, 2024[158]. - The company has no debt during the three-month periods ended December 27, 2024, and December 29, 2023[157]. Accounts and Obligations - Accounts receivable decreased by $14,746 to $68,297, consistent with lower sales volumes year over year[153]. - The company has contractual obligations and commitments for future payments under operating leases and open purchase orders, with no significant changes during the quarter[159]. - Letters of credit outstanding were approximately $67 as of December 27, 2024, consistent with the prior year[160]. Investments and Acquisitions - The Company acquired a scuba equipment manufacturer for $12,180 during the first quarter, expected to enhance product offerings and operational efficiencies[130]. - Capital expenditures were $4,084 in the three months ended December 27, 2024, down from $5,004 in the prior year, which included investments in expanding fishing facilities[156]. Risk and Accounting Policies - There were no significant changes to the company's critical accounting policies and estimates during the three months ended December 27, 2024[162]. - The company remains exposed to market risks including foreign currency exchange rates, interest rates, commodity prices, and inflation, with no significant changes noted[163].