Johnson Outdoors Shares Slide After Q4 Earnings Miss, Hit By Market Challenges And Lower Margins

Johnson Outdoors Inc JOUT shares plunged after the company reported its fourth-quarter 2024 results.

The company’s sales grew 9.9% year-over-year to $105.9 million, missing the consensus of $114.99 million. Loss per share was $3.35, missing the consensus loss of $0.98.

Gross margin contracted 600 bps to 23.5%, primarily due to higher promotional discounts, a shift in product mix favoring lower-margin items, and inventory reserves for slow-moving and obsolete stock. Gross profit was down 12.4% to $24.87 million.

The operating loss widened to $42.8 million in the quarter, compared to $22.6 million in the same quarter last year.

Operating expenses rose mainly due to the goodwill write-off, leading to a pre-tax loss of $39.7 million this quarter versus a $22.1 million loss last year.

As of September 27, 2024, the company held $162.0 million in cash and investments, a $9.5 million increase year over year, and had no debt.

Fiscal 2024 revenue declined 11% YoY to $592.8 million from $663.8 million in fiscal 2023 due to market challenges and lower demand across all segments.

The fiscal year ended with a net loss of $26.5 million, or $2.60 per diluted share, compared to a net income of $19.5 million, or $1.90 per diluted share, in the prior year.

Gross margin declined to 33.9% from 36.8%, as cost savings were outweighed by lower sales volume impacts, unfavorable fixed cost absorption, and a shift to lower-margin products.

“In fiscal 2024, despite the operating loss, we drove positive cash flow from operations through prudent inventory management. Additionally, we focused on operational cost savings and efficiencies to mitigate impacts from challenging market dynamics. We will strategically manage costs in fiscal 2025 while at the same time making investments to strengthen the business,” commented David W. Johnson, Vice President and Chief Financial Officer.

Price Action: JOUT shares are trading lower by 5.68% at $32.49 at the last check Tuesday.

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