RACINE, Wis. - Johnson Outdoors Inc. (NASDAQ:JOUT), a prominent innovator in outdoor recreation equipment, reported a significant decline in its second-quarter revenue and earnings per share (EPS), falling short of Wall Street expectations.
The company's revenue for the quarter was $175.9 million, a 13% decrease from the $202.1 million reported in the same quarter last year and below the analyst consensus of $198.86 million. Adjusted EPS came in at $0.21, considerably lower than the $0.98 analysts had estimated.
The company's financial performance reflects a challenging market environment, with all four business segments experiencing increased competitive pressure and other segment-specific headwinds. Over half of the Camping segment's decline was attributed to the divestiture of the Military and Commercial Tents business in the previous year, while the Diving segment was affected by geopolitical issues impacting travel.
Johnson Outdoors' operating loss for the quarter was $0.25 million, a stark contrast to the $11.4 million operating profit in the prior year's second quarter. Gross margin also saw a decline to 34.9% from 37.3% in the same quarter last year, primarily due to unfavorable overhead absorption and promotional price reductions. Despite these challenges, the company managed to reduce operating expenses by $2.3 million from the prior year, thanks to lower sales volumes, reduced incentive compensation, and professional services expenses, partially offset by increased promotional spending.
Helen Johnson-Leipold, Chairman and Chief Executive Officer of Johnson Outdoors, stated, "Our second quarter results reflect challenging marketplace conditions. We are investing in marketing and promotions and supporting our new product launches, like the new Minn Kota Quest trolling motor line that is seeing positive response from the trade." She also emphasized the company's focus on innovation and brand strengthening for long-term success.
Year-to-date, net sales declined by 17% to $314.5 million, with an operating loss of $0.2 million compared to an operating profit of $16.9 million in the prior year. The company's effective tax rate increased to 31.4% from 26.2% in the previous year's six-month period.
David W. Johnson, Vice President and Chief Financial Officer, commented on the company's financial health, "While we've been making progress on inventory levels, we are continuing our efforts to improve profitability by managing expenses and expanding our cost savings program. Our debt-free balance sheet and cash position continue to enable us to invest in strategic opportunities to strengthen the business, while consistently paying dividends to shareholders."
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.