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JOHNSON OUTDOORS INC (JOUT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered a slight beat to Wall Street consensus: revenue $168.35M vs $168.05M estimate and diluted EPS $0.22 vs $0.21 estimate; gross margin held at 35.0% despite discounting, aided by cost savings initiatives (1–2 pts) . EPS and revenue beats vs consensus are modest but constructive in a cautious retail environment; both had a single estimate providing limited signal strength (Primary EPS - # of Estimates=1; Revenue - # of Estimates=1)*.
  • Mix was mixed across segments: Fishing down 3% YoY to $134.9M but delivered higher operating profit ($9.5M), Camping & Watercraft down 12% with Jetboil growth offsetting watercraft declines and Eureka! exit, Diving down 7% on broad demand softness .
  • Operating profit improved to $4.9M from a $(0.3)M loss YoY; inventory fell to $180.1M (down ~$69M YoY), and cash/short-term investments were $94.0M; management emphasized a debt-free balance sheet and continued dividend ($0.33 Class A/$0.30 Class B) .
  • Management flagged tariffs as a meaningful near-term headwind; mitigation actions include supply chain adjustments, operational efficiencies, and selective pricing; tax rate was unusually high in Q2 due to European audit accruals, a one-off item .
  • Near-term stock narrative catalysts: continued sell-through of new Humminbird (MEGA Live 2, Xplore) and Jetboil products, ongoing inventory normalization and cost savings, vs. tariff uncertainty and macro-pressured Diving and Watercraft markets .

What Went Well and What Went Wrong

What Went Well

  • New product momentum: “MEGA Live 2 and Xplore… demand has been exceeding expectations” in Fishing; Jetboil launched next-level Fast Boil systems with orders outpacing expectations .
  • Profitability inflection: operating profit of $4.9M vs $(0.25)M YoY; gross margin stable at 35.0% with cost savings offsetting discounting; OpEx down $7.7M YoY .
  • Working capital progress: inventory at $180M, down ~$69M YoY, and strong cash position; management reiterated debt-free balance sheet and confidence in long-term value creation .

What Went Wrong

  • Top-line pressure: total net sales down 4% YoY to $168.3M; Fishing (-3%), Camping & Watercraft (-12%), Diving (-7%); macro and cautious retail/trade cited .
  • Elevated tax rate: Q2 effective tax rate 44.6% vs 28.4% YoY; CFO cited European audit accrual and jurisdictional mix as drivers of the quarterly spike .
  • Tariff overhang: management expects tariffs to impact the business given imported components; mitigation in progress but outlook remains challenged for the season .

Financial Results

MetricQ2 2024Q1 2025Q2 2025Q2 2025 Consensus
Revenue ($USD Millions)$175.856 $107.649 $168.349 $168.047*
Diluted EPS ($)$0.21 $(1.49) $0.22 $0.21*
Gross Margin %34.9% 29.9% 35.0% —
Operating Income ($USD Millions)$(0.253) $(20.239) $4.901 —

Values with asterisks retrieved from S&P Global.

Segment Net Sales

SegmentQ2 2024Q2 2025
Fishing ($USD Millions)$138.608 $134.891
Camping & Watercraft Recreation ($USD Millions)$20.248 $17.852
Diving ($USD Millions)$16.924 $15.820
Other / Eliminations ($USD Millions)$0.076 $(0.214)
Total ($USD Millions)$175.856 $168.349

Segment Operating Profit (Loss)

SegmentQ2 2024Q2 2025
Fishing ($USD Millions)$7.427 $9.469
Camping & Watercraft Recreation ($USD Millions)$1.223 $1.246
Diving ($USD Millions)$(0.298) $(0.413)
Other / Eliminations ($USD Millions)$(8.605) $(5.401)
Total ($USD Millions)$(0.253) $4.901

KPIs and Balance Sheet

KPIQ2 2024Q2 2025
Cash, cash equivalents and short-term investments ($USD Millions)$84.270 $93.951
Accounts receivable, net ($USD Millions)$129.345 $116.776
Inventories, net ($USD Millions)$249.201 $180.057
Total liabilities ($USD Millions)$191.589 $183.372
Shareholders’ equity ($USD Millions)$500.089 $441.102
Effective Tax Rate (%)28.4% 44.6%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Financial guidance (revenue/EPS/margins)FY 2025None provided None provided; tariffs expected to impact; mitigation via supply chain, efficiencies, pricing Maintained “no formal guidance”; qualitative tariff headwind
Gross margin benefit from cost savingsFY 2025Indicated 1–2 pts benefit Reiterated 1–2 pts; aiming to expand medium/long term Maintained; potential expansion
DividendQ2 2025Quarterly dividend approved Dec 2024; payable Jan 23, 2025 ($0.33 A / $0.30 B) Quarterly dividend payable Apr 24, 2025 ($0.33 A / $0.30 B) Maintained recurring dividend

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q4 2024; Q-1: Q1 2025)Current Period (Q2 2025)Trend
Product innovation momentumQ-2: Ongoing investment in innovation despite tough markets ; Q-1: New Humminbird tech launched; shipping began Jan; positive retail reception MEGA Live 2/Xplore exceeding expectations; Jetboil next-level Fast Boil orders outpacing expectations; Old Town launched 5 watercraft additions Improving demand for new products
Supply chain & inventoryQ-2: Positive cash flow via inventory management; inventory elevated ; Q-1: Inventory $201.6M; down ~$66M YoY Inventory $180M; down ~$69M YoY; continued diligence Improving inventory position
Tariffs/macroQ-2: Tariffs flagged in risk disclosures ; Q-1: Mitigation plans in progress; leveraging U.S. footprint Tariffs will impact business; mitigation via supply chain, efficiencies, selective pricing Escalating external headwind; active mitigation
Diving businessQ-2: Diving sales down 13% FY24; operational pressures ; Q-1: Acquired SCUBAPRO supplier; ~$14M price; vertical integration to drive efficiency Diving market soft; focus on operational efficiencies Structural improvement amid demand softness
Cost savingsQ-2: Cost savings to mitigate margin pressure ; Q-1: Expanding program incl. sourcing and design 1–2 pts gross margin benefit in Q2; aim to expand Ongoing, expanding
Retail demand/orderingQ-1: Cautious ordering; mixed retail inventories No initial retailer pullback post tariff announcement, but expect a challenged season Cautious but stable orders

Management Commentary

  • “We saw positive results from new products in our fishing and camping businesses… demand has been exceeding expectations” (Humminbird MEGA Live 2 and Xplore; Jetboil Fast Boil) .
  • “Tariffs will impact our business… we are focused on multiple strategies to mitigate… adjusting our supply chain strategy, looking for operational efficiencies and [considering] potential adjustments to our pricing” .
  • “Gross margin in the second quarter was 35%… Operating expenses decreased $7.7 million… inventory balance as of March was $180 million, down about $69 million from last year's second quarter… our balance sheet remains debt free” .
  • “Old Town launched 5 new watercraft additions… equipped with pedal or electric propulsion” .

Q&A Highlights

  • New product pipeline: Management reiterated strong innovation cadence across Fishing and Camping, with newly launched products “beating expectations”; Watercraft new line launched, targeted to recreational and angling experiences .
  • Tariffs exposure and mitigation: Despite U.S. manufacturing, JOUT imports electronic components and raw materials from China/Southeast Asia; mitigation actions include supply chain changes, efficiencies, and pricing where appropriate .
  • Gross margin puts/takes and cost savings: Cost savings provided 1–2 pts benefit in Q2; discounting pressure persisted; management aims to expand savings over the medium/long term .
  • Retailer response: Initial reaction to tariffs showed no major pullback; management still expects a challenged season .
  • Tax rate: Q2 tax rate unusually high due to European audit accrual and jurisdictional mix; described as a one-off item .

Estimates Context

  • Q2 2025 results vs consensus: Revenue $168.35M vs $168.05M estimate (beat); diluted EPS $0.22 vs $0.21 estimate (beat); both had a single estimate, limiting signal strength*.
  • Implications: Modest beats likely reflect cost savings offsetting discounting and initial traction from new product launches; estimate revisions may edge higher if sell-through sustains and tariff mitigation proves effective near-term .

Values with asterisks retrieved from S&P Global.

Key Takeaways for Investors

  • Slight revenue and EPS beats against consensus in a tough macro backdrop suggest operational execution is improving, supported by cost savings and product innovation *.
  • Gross margin resilience (35.0% vs 34.9% YoY) despite discounting, aided by 1–2 pts cost savings, indicates progress on margin defense .
  • Working capital progress continues: inventory reduced to $180.1M (down ~$69M YoY) and cash/short-term investments at $94.0M; debt-free balance sheet provides flexibility .
  • Tariffs are the primary near-term overhang; mitigation (supply chain, efficiencies, pricing) is underway, but management expects a challenged balance of season .
  • Segment mix: Fishing profitability improved ($9.5M OP) despite revenue decline; Jetboil momentum offsets some Camping & Watercraft weakness; Diving softness persists .
  • Dividend maintained ($0.33 Class A / $0.30 Class B), underscoring balance sheet strength and capital return commitment .
  • Monitoring points: sell-through of MEGA Live 2/Xplore and Jetboil innovations, retailer ordering trends, tariff developments, and incremental cost savings; these are key swing factors for near-term estimates and stock narrative .