Executive Summary

Solid Q3: Revenue grew 5% YoY to $180.7M and diluted EPS rose to $0.75, with gross margin expanding 180 bps to 37.6% on higher volumes, lower discounting, and cost actions . Versus S&P Global consensus, JOUT beat on revenue ($180.7M vs $176.6M*) and EPS ($0.75 vs $0.24*).
Strength in Fishing: Segment sales +8% on new product momentum (Humminbird XPLORE/MegaLive 2; Minn Kota Riptide Instinct brushless) and awards at ICAST; Diving +7% helped by FX; Camping & Watercraft -14% on Eureka! exit (ex-Eureka! +3%) .
Operating turn: Q3 operating profit of $7.3M vs a $(0.5)M loss last year; operating expenses fell $1.7M YoY; inventory down ~$59M YoY to $163.7M, supporting working capital and margin progress .
Watch Q4 tariffs: CFO expects additional tariff costs to flow through in Q4; mitigation includes pricing, supply chain, and efficiencies. Dividend maintained at $0.33/$0.30 per Class A/B, payable July 24, 2025 .
Stock narrative: Innovation-led share gains in Fishing and visible cost discipline vs macro and tariff headwinds; catalysts include XPLORE adoption, tariff clarity/mitigation, and continued inventory normalization .

What Went Well and What Went Wrong

What Went Well
- Innovation driving outperformance: “This quarter’s positive results emphasize the importance of our focus and investment on delivering market‑winning innovation” (CEO), with Humminbird XPLORE winning “Best of Electronics” at ICAST .
- Margin and cost execution: Gross margin expanded to 37.6% (from 35.8%) on better overhead absorption and lower discounting; OpEx down $1.7M YoY; inventory down ~$59.4M YoY, improving working capital (CFO) .
- Fishing momentum: Fishing sales +8% on strong new products; Diving +7% aided by stronger conditions and FX (+2% impact) .
What Went Wrong
- Segment pressure: Camping & Watercraft -14% on Eureka! exit (ex-Eureka! +3%); watercraft market remains weak; Diving still challenged by macro/travel uncertainty .
- Tariff headwind: CFO anticipates “more costs coming in the fourth quarter” as tariffs flow through inventories; pricing actions being evaluated .
- YTD softness: FY25 YTD net sales down 6.2%; YTD gross margin down to 34.8% and operating loss of $(8.0)M vs $(0.7)M prior year .

Financial Results

Consolidated results (oldest → newest):

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Revenue ($M)	$172.5	$107.6	$168.3	$180.7
Revenue Consensus ($M)*	—	$104.7*	$168.0*	$176.6*
Diluted EPS ($)	$0.16	$(1.49)	$0.22	$0.75
EPS Consensus ($)*	—	$(1.30)*	$0.21*	$0.24*
Gross Margin (%)	35.8%	29.9%	35.0%	37.6%
Operating Profit ($M)	$(0.5)	$(20.2)	$4.9	$7.3
Operating Expenses ($M)	$62.3	$52.4	$54.0	$60.6
Net Income ($M)	$1.6	$(15.3)	$2.3	$7.7
Effective Tax Rate	78.8% benefit	19.2%	44.6%	26.3%

Values with asterisks are from S&P Global consensus. Values retrieved from S&P Global.

Segment net sales ($M):

Segment	Q3 2024	Q2 2025	Q3 2025
Fishing	$130.5	$134.9	$140.7
Camping & Watercraft Rec.	$22.0	$17.9	$18.9
Diving	$19.9	$15.8	$21.2
Other/Elims	$0.1	$(0.2)	$(0.1)
Total	$172.5	$168.3	$180.7

Segment operating profit ($M):

Segment	Q3 2024	Q2 2025	Q3 2025
Fishing	$5.3	$9.5	$14.6
Camping & Watercraft Rec.	$2.0	$1.2	$1.6
Diving	$0.9	$(0.4)	$1.6
Other/Elims	$(8.7)	$(5.4)	$(10.4)
Total	$(0.5)	$4.9	$7.3

KPIs (working capital and capital returns):

KPI	Q1 2025	Q2 2025	Q3 2025
Cash & short-term investments ($M)	$101.6	$94.0	$161.0
Inventories ($M)	$201.6	$180.1	$163.7
Gross Margin (%)	29.9%	35.0%	37.6%
Capital Spending (quarter, $M)	$4.1	—	$11.8
Dividend (declared)	—	—	$0.33 Class A / $0.30 Class B per share (payable 7/24/25)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Tariff impact	Q4 2025	Tariffs identified as headwind; mitigation in progress	CFO expects “more costs coming in the fourth quarter” as tariffs flow through; mitigation via pricing, supply chain, efficiencies	Updated/clarified
Dividend	Q3 2025	Regular quarterly dividend maintained historically	$0.33 (Class A) / $0.30 (Class B), payable July 24, 2025	Maintained

Note: No quantitative revenue/EPS/margin guidance was provided in Q3 materials; management commentary focused on mitigation plans and strategic priorities .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 FY25)	Current Period (Q3 FY25)	Trend
Innovation/new products	Q1: Humminbird launches; strong trade reception; Jetboil pipeline . Q2: MEGA Live 2/XPLORE shipping; demand exceeding expectations; Jetboil fast‑boil systems strong .	XPLORE wins ICAST “Best of Electronics”; Fishing demand exceeding expectations; Minn Kota award for Riptide Instinct brushless .	Improving momentum in Fishing
Tariffs	Q1: New tariffs flagged; mitigation planning underway . Q2: Tariffs will impact; exploring pricing/supply chain/efficiencies .	CFO expects more costs in Q4; mitigation continues (pricing evaluated) .	Headwind near term; mitigation progressing
Promotions/pricing	Q1: Higher promotional pricing hurt margins . Q2: Discounting persisted but offset by cost savings .	Lower discounting aided Q3 margin; pricing actions on select lines; will consider promotions tactically .	Improving mix/discipline
Inventory management	Q1: Working to reduce elevated inventories . Q2: Inventory $180M (down ~$69M YoY) .	Inventory $163.7M and down ~$59.4M YoY; more improvement targeted .	Improving
Cost savings	Q1: Factory efficiencies, sourcing, design-to-cost initiatives . Q2: ~1–2 pts gross margin benefit; expanding program .	Continued savings; OpEx down YoY; focus on product cost improvements .	Ongoing tailwind
Demand cadence	Q2: Market challenged; cautious retail/trade .	Sales improved each month in Q3; seasonally softer Q4 ahead .	Stabilizing/seasonal

Management Commentary

Strategic focus: “We continue to make progress against our strategic priorities—innovation, digital and ecommerce, and operational efficiency—which are critical to achieving our goal of delivering future healthy profitable growth.” — CEO .
Margin/working capital: “We continue to benefit from our ongoing focus on improved operational efficiency, helping us to strengthen margins and effectively manage working capital.” — CFO .
Fishing innovation: “Our Explorer series captured Best in Electronics honors at ICAST…Integration with Minn Kota means anglers can easily connect their XPLORE with the best trolling motors and shallow water anchors” — Press Release .
Balance sheet discipline: “Our balance sheet remains debt‑free and we have a solid cash position.” — CFO .

Q&A Highlights

Demand cadence: “Every month we saw improvement in our sales” during Q3; Q4 is seasonally smaller .
Tariff outlook: “I do expect more costs coming in the fourth quarter…we’re ready to mitigate these tariffs as we head into next season” .
Pricing/promo: Pricing taken on certain lines; will evaluate further given consumer/competitive dynamics. Promotions to be used tactically depending on market conditions .
Inventory: Inventory reductions to continue; more improvement targeted despite macro/tariff caveats .

Estimates Context

Beat versus S&P Global consensus in Q3: Revenue $180.7M vs $176.6M* and EPS $0.75 vs $0.24*; Q2 was roughly in line/slight beat; Q1 slightly above on revenue but below on EPS .
Coverage thin: consensus based on a single estimate for each period, increasing potential variability in outcomes and future revisions.*

Actual vs S&P Global consensus (oldest → newest):

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue Actual ($M)	$107.6	$168.3	$180.7
Revenue Consensus ($M)*	$104.7*	$168.0*	$176.6*
Diluted EPS Actual ($)	$(1.49)	$0.22	$0.75
EPS Consensus ($)*	$(1.30)*	$0.21*	$0.24*

Values with asterisks are from S&P Global consensus. Values retrieved from S&P Global.

Key Takeaways for Investors

Innovation-led share momentum in Fishing is translating into top-line growth and segment profit leverage; XPLORE adoption and Minn Kota brushless traction are catalysts into next season .
Margin trajectory is improving on lower discounting, better absorption, and cost savings; gross margin up to 37.6%, offering operating leverage if demand holds .
Tariffs are the near-term swing factor: management expects higher Q4 costs but is pursuing pricing and supply chain actions; clarity on mitigation could move the stock .
Working capital progress continues (inventory $163.7M, down YoY), supporting cash ($161.0M) and flexibility while maintaining the dividend .
Segment mix matters: Fishing strength offsets Camping/Watercraft headwinds tied to Eureka! exit and soft watercraft category; Diving improved but remains macro-sensitive .
Estimates may need upward revision for Q3 actuals; given thin coverage (one estimate), watch for recalibration of FY25 EPS/revenue and any Q4 tariff commentary in updates.*
Near-term trading setup: positive momentum from Q3 beat and product awards vs caution on Q4 tariff costs and seasonality; medium-term thesis hinges on sustained electronics innovation and execution on cost/mitigation plans .

Appendix: Source References

Q3 2025 press release and 8-K (Item 2.02) including financial tables and gross margin commentary .
Q3 2025 earnings call transcript (prepared remarks and Q&A) .
Q2 2025 press release and call for sequential context .
Q1 2025 press release and call for trend analysis .
Dividend declaration within the quarter .

JOHNSON OUTDOORS INC (JOUT)·Q3 2025 Earnings Summary