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JOHNSON OUTDOORS INC (JOUT)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was weak: net sales fell 22% to $107.6M and diluted EPS declined to -$1.49 as promotional pricing, unfavorable overhead absorption, and mix pressured margins; gross margin was 29.9% vs 38.1% YoY .
  • Fishing (-25% revenue) drove the miss due to tough marine market/competitive dynamics and a tough comparison versus prior-year Minn Kota Quest load-in; Diving (-10%) and Camping & Watercraft (-12%) also declined .
  • Management emphasized ongoing cost savings (factory efficiency, sourcing, product design) and inventory reduction; inventory fell to $201.6M from $267.3M YoY, and the balance sheet remains debt-free .
  • Directionally cautious: management does not expect the market to bounce back in Q2; innovation ramp (Humminbird tech shipped in January) and a $14M vertical-integration acquisition in Diving were highlighted as medium-term positives .
  • Dividend was maintained ($0.33 Class A/$0.30 Class B), offering income support amidst earnings softness .

What Went Well and What Went Wrong

What Went Well

  • Innovation momentum: Humminbird launched new technology with positive retail reception; shipping began in January (not reflected in Q1 results) .
  • Cost actions gaining traction: factory efficiency and scrap reductions contributed, with expanded initiatives in sourcing and product design to lower product costs .
  • Balance sheet strength and inventory progress: debt-free and continuing dividend; inventories down ~$66M YoY to $201.6M .

Quotes:

  • “We are strengthening our innovation capability… Humminbird brand… positive reception… These products start shipping in January and are not reflected in our first quarter results” .
  • “Our balance sheet remains debt-free… and we continue to pay a meaningful dividend” .
  • “We’re expanding… looking at our product design and trying to just take cost physically out of the product” .

What Went Wrong

  • Top-line and margin pressure: net sales -22% and gross margin down to 29.9% from 38.1% YoY due to promotions, unfavorable absorption, and mix .
  • Segment weakness concentrated in Fishing: -25% revenue and swing to segment operating loss, reflecting tough end-market and competitive dynamics; Watercraft remains challenged .
  • Directionally cautious demand outlook: cautious retail/trade environment and management does not expect a Q2 market bounce-back .

Financial Results

Consolidated Results vs Prior Quarters

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$172.5 $105.9 $107.6
Diluted EPS ($USD)$0.16 -$3.35 -$1.49
Gross Margin %35.8% 23.5% (Gross profit $24.9; revenue $105.9) 29.9%
Operating Income ($USD Millions)-$0.5 -$42.8 -$20.2

Notes: Q4 2024 gross margin % is derived from reported revenue and gross profit .

Year-over-Year (Q1 2025 vs Q1 2024)

MetricQ1 2024Q1 2025YoY Change
Revenue ($USD Millions)$138.6 $107.6 -22.3%
Diluted EPS ($USD)$0.38 -$1.49 -$1.87
Gross Margin %38.1% 29.9% -8.2 pts
Operating Income ($USD Millions)$0.05 -$20.2 -$20.3

Segment Net Sales Trend

SegmentQ3 2024Q4 2024Q1 2025
Fishing ($USD Millions)$130.5 $72.7 $82.5
Camping & Watercraft ($USD Millions)Camping: $10.9; Watercraft: $11.1 Camping: $10.5; Watercraft: $3.2 Combined: $9.5
Diving ($USD Millions)$19.9 $19.4 $15.7
Other/Elims ($USD Millions)$0.1 $0.1 $0.04
Total ($USD Millions)$172.5 $105.9 $107.6

Segment note: Camping and Watercraft were combined into one reporting segment beginning Q1 2025 .

Segment Operating Profit/Loss Trend

SegmentQ3 2024Q4 2024Q1 2025
Fishing ($USD Millions)$5.3 -$30.8 -$8.3
Camping & Watercraft ($USD Millions)Camping: $1.5; Watercraft: $0.6 Camping: $0.3; Watercraft: -$2.3 Combined: -$0.6
Diving ($USD Millions)$0.9 -$1.3 -$0.9
Other/Elims ($USD Millions)-$8.7 -$8.7 -$10.4
Total ($USD Millions)-$0.5 -$42.8 -$20.2

KPIs

KPIQ3 2024Q4 2024Q1 2025
Cash & ST Investments ($USD Millions)$148.4 $162.0 $101.6
Accounts Receivable, net ($USD Millions)$79.6 $40.6 $68.3
Inventories, net ($USD Millions)$223.2 $209.8 $201.6
Shareholders’ Equity ($USD Millions)$498.7 $463.4 $440.3
Weighted Avg Diluted Shares (Millions)10.249 10.237 10.270

Operational notes: Gross margin headwinds primarily from promotional pricing, unfavorable absorption, and mix ; Other income declined YoY due to deferred comp asset performance and absence of prior-year one-time building sale gain .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Market demand outlookQ2 2025Cautious end-market conditions (ongoing) “We don’t expect the market to bounce back in Q2” Maintained cautious tone
Cost savingsFY 2025Operational savings underway Expanding into sourcing and product design to take costs out of products Expanded
Tariffs/macroFY 2025Monitoring potential tariffs; mitigation discussed Active mitigation plans leveraging U.S. footprint; exposure to China/Mexico/Canada noted Heightened focus
Segment reportingFY 2025Camping and Watercraft reported separatelyCombined into “Camping & Watercraft Recreation” as of Q1 2025 Structural change
DividendQ2 2025$0.33 Class A/$0.30 Class B (declared Dec 5, 2024) $0.33 Class A/$0.30 Class B (payable Apr 24, 2025) Maintained

No formal quantitative revenue/EPS/margin guidance ranges were provided; management shared directional commentary instead .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Innovation/product pipelineInvesting to drive growth; pipeline of new products Highlighted XPLORE and MEGA Live 2 launches in Fishing Humminbird new tech shipping in January; positive retail reception Strengthening
E-commerce/digitalEmphasis on digital/e-commerce to accelerate growth Enhancing go-to-market and online presence Building Digital Commerce Center of Excellence Increasing investment
Inventory & operationsInventory reduction efforts; factory efficiencies Inventory down $51.7M YoY; operational savings offset by mix/absorption Inventory $201.6M; down ~$66M YoY; debt-free balance sheet Improving
Pricing/promotionsHeavy promotional activity pressured margins Promotional pricing significantly impacted gross margin Discounting exacerbated unit declines; margin hit Persistent headwind
Tariffs/macroMonitoring potential tariffs, mitigation to come Preliminary mitigation strategies Active mitigation plan leveraging U.S. manufacturing footprint; exposure acknowledged Ongoing risk; mitigation plans
Segment performanceWatercraft challenged; broad demand softness Fishing impairment; Watercraft weak Camping better than Watercraft in quarter; Fishing down 25% Mixed; Watercraft challenged
M&A/vertical integration——Diving acquisition (~$14M) in South Africa to improve efficiency/innovation Added capability

Management Commentary

  • “We are strengthening our innovation capability… Humminbird… positive reception… These products start shipping in January and are not reflected in our first quarter results” .
  • “We are investing in [a] digital commerce Center of Excellence… to accelerate sales and profitability” .
  • “Our inventory balance… was $201.6 million, down about $66 million from last year’s first quarter… our balance sheet remains debt-free… and we continue to pay a meaningful dividend” .
  • “Gross margin in the first quarter was negatively impacted by increased promotional pricing, unfavorable overhead absorption and unfavorable product mix” .

Q&A Highlights

  • Pricing vs volume: Units down, further exacerbated by discounting; CFO could not provide exact breakdown .
  • Diving acquisition: ~$14M purchase price; located in South Africa; expected to increase efficiency and innovation for SCUBAPRO .
  • Demand/inventory outlook: Trade inventory mixed by partner/category; cautious ordering; management does not expect market to bounce back in Q2 .
  • Segment dynamics: Camping better than Watercraft; paddling market still challenged .
  • Cost savings: Progress in factory efficiency and scrap; expanding to sourcing and product design; Q1 impact masked by discounting .
  • Tariffs exposure: Business with China/Mexico/Canada; mitigation strategies in progress; leveraging U.S. footprint .

Estimates Context

  • S&P Global consensus estimates were unavailable at time of analysis due to provider limit; therefore, a direct comparison to Wall Street consensus cannot be provided.*
  • One covering analyst (Sidoti) noted company revenue came in above his estimate, but margin pressure from promotions persisted .

*Values retrieved from S&P Global were unavailable.

Key Takeaways for Investors

  • Near-term pressure persists: promotional activity and unfavorable absorption/mix continue to weigh on margins; management does not expect a Q2 demand bounce .
  • Watch Fishing innovation adoption: Humminbird new tech shipping in January with positive retail reception could support seasonal sell-through; monitor pricing discipline .
  • Segment mix risk: Watercraft remains challenged; Camping showing relative resilience; Fishing still the key swing factor .
  • Structural changes and M&A: combining Camping & Watercraft simplifies reporting; Diving acquisition adds efficiency and innovation capacity—evaluate medium-term margin impact .
  • Inventory trending better and balance sheet strength: inventory down ~$66M YoY; debt-free status and maintained dividend provide downside support .
  • Tariffs headline risk: exposure to imported components from China/Mexico/Canada; mitigation through U.S. footprint underway—track cost impact and pricing response .
  • Actionable: favor cautious positioning into Q2 given management tone; potential catalysts include successful spring/summer sell-through of new Fishing products and evidence of gross margin improvement from cost actions .

Sources: Q1 2025 press release/8-K ; Q1 2025 earnings call ; Q4 2024 press release/call ; Q3 2024 press release/call ; Dividend updates .