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JOHNSON OUTDOORS INC (JOUT)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 net sales rose 9.9% year over year to $105.9M, but the quarter posted a deep operating loss of ($42.8M) and diluted EPS of ($3.35) driven by increased promotions, lower-margin mix, inventory reserves, and an $11.2M goodwill impairment in Fishing .
  • Gross margin compressed sharply; management quantified Q4 drivers: ~2.5 pts from promotional pricing, ~2.5 pts from mix, and ~1 pt from inventory reserves; cost-savings added ~2 pts for FY24 but were masked by unfavorable overhead absorption .
  • Balance sheet remained a key positive: $162.0M cash/investments and no debt; inventories fell ~$51.7M YoY to $209.8M, enabling positive cash flow from operations for the year .
  • No explicit quantitative guidance was issued; management will “strategically manage costs” in FY25 while investing in innovation (Humminbird MEGA Live 2, XPLORE), go-to-market, and operational efficiencies; quarterly dividend maintained ($0.33 Class A/$0.30 Class B) .
  • Stock reaction catalysts: severe margin compression and impairment vs. improving cash/inventory and continued dividend; competitive intensity and promotional cadence remain headwinds per management .

What Went Well and What Went Wrong

What Went Well

  • Debt-free balance sheet with $162.0M cash/investments and positive cash flow from operations in FY24 despite losses .
  • Inventory management improved materially; inventories at September were $209.8M, down ~$51.7M YoY, supporting the CFO’s assertion of positive CFO and improved working capital .
  • Innovation pipeline highlighted for FY25: Fishing launches including Humminbird MEGA Live 2 and XPLORE; incremental Watercraft Recreation entries and Jetboil launches; focus on quality over quantity to drive consumer engagement .

What Went Wrong

  • Q4 gross margin deterioration: ~6 pts YoY driven by ~2.5 pts promotional pricing, ~2.5 pts mix, and ~1 pt inventory reserves; overall quarter posted net loss ($34.3M) and operating loss ($42.8M) .
  • FY24 operating expenses rose $12.2M, primarily due to non-cash $11.2M goodwill impairment in Fishing, higher bad debt reserves ($2.5M), and severance ($1.5M) .
  • Competitive pressures and cautious retail ordering persisted across categories; management expects near-term market/mix pressures to remain, implying continued promotional intensity .

Financial Results

Consolidated P&L Trends (oldest → newest)

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Net Sales ($USD Millions)$96.345 $175.856 $172.472 $105.874
Gross Profit ($USD Millions)$28.386 $61.431 $61.822 $24.873
Gross Margin %29.5% (computed from $28.386/$96.345) 34.9% 35.8% 23.5% (computed from $24.873/$105.874)
Operating (Loss) Profit ($USD Millions)($22.565) ($0.253) ($0.506) ($42.809)
Diluted EPS ($USD)($1.56) $0.21 $0.16 ($3.35)

Notes:

  • Q4 FY24 operating expenses included the $11.2M goodwill impairment (Fishing) and severance, intensifying the operating loss .
  • Management quantified Q4 GM drivers: ~2.5 pts from promotions, ~2.5 pts from mix, ~1 pt reserves .

Segment Net Sales ($USD Millions)

SegmentQ2 2024Q3 2024Q4 2024
Fishing$138.608 $130.537 $72.704
Camping$10.520 $10.927 $10.475
Watercraft Recreation$9.728 $11.070 $3.205
Diving$16.924 $19.861 $19.365
Other/Elims$0.076 $0.077 $0.125
Total$175.856 $172.472 $105.874

Segment Operating Profit (Loss) ($USD Millions)

SegmentQ2 2024Q3 2024Q4 2024
Fishing$7.427 $5.258 ($30.812)
Camping$1.709 $1.474 $0.307
Watercraft Recreation($0.486) $0.557 ($2.329)
Diving($0.298) $0.898 ($1.266)
Other/Elims($8.605) ($8.693) ($8.709)
Total($0.253) ($0.506) ($42.809)

KPIs

KPIQ2 2024Q3 2024Q4 2024
Cash & Short-Term Investments ($USD Millions)$84.270 $148.369 $162.039
Inventories, net ($USD Millions)$249.201 $223.160 $209.788
Diluted Shares (Millions)10.234 10.249 10.237
Dividend per Share—$0.33 Class A/$0.30 Class B (announced Sep; paid Oct 25, 2024) $0.33 Class A/$0.30 Class B (payable Jan 23, 2025)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY25None providedNone providedMaintained: No quantitative guidance
Gross MarginFY25None providedNone provided; management noted continued competitive and promotional pressuresMaintained: No quantitative guidance
Operating ExpensesFY25None providedCost structure actions continue; Q4 job eliminations to reduce OpEx going forwardQualitative update only
Cash DividendNext PaymentPrior quarterly cadence maintained$0.33 Class A / $0.30 Class B payable Jan 23, 2025Announced
Balance SheetOngoingDebt-freeDebt-free; $162.0M cash/investmentsMaintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
Promotional intensity & pricingElevated promotions; discounting offset price increases; ad/promo up ~$4.5M YoY in Q3 ~2.5 pts GM headwind from promotional pricing in Q4; mix another ~2.5 pts Promotional pressure persistent; mix skew to lower-margin products intensifying
Inventory & retail orderingRetail cautious; sequential inventory reductions; Q2 inventories $249.2M; Q3 $223.2M Inventories $209.8M; mixed retail inventory; cautious trade partners Improving company inventories; retail cautiousness remains
Cost savings & operationsFactory efficiencies/logistics savings; “halftime” in program ~2 pts FY24 GM benefit from savings; Q4 job eliminations to reduce OpEx; plans to expand sourcing savings Savings ongoing but masked by mix/absorption; program expanding
Innovation & product pipelineMinn Kota QUEST restage; innovation to offset demand softness Focus on quality launches (Humminbird MEGA Live 2, XPLORE; Jetboil; Water Rec entry) Pipeline building; intent to drive top-line with innovation
Tariffs/macroMacro uncertainty impacting demand; cautious retailers Monitoring potential tariffs in 2025; mitigation strategies under review Macro risk remains; tariff exposure monitored
Segment demand trendsSoft demand across categories; Diving lagging at retail Fishing up YoY in Q4 sales, Diving down YoY; competitive marine dynamics persist Mixed; Fishing sales recovery in Q4; Diving softer YoY

Management Commentary

  • “Fiscal 2024 is tough… we are committed to investing in the strategic priorities that will position our brands for long-term growth while also working hard to improve our financial performance.” — Helen Johnson-Leipold .
  • “Our balance sheet remains debt-free… inventory balance as of September was $209.8 million, down about $51.7 million from last year’s fourth quarter… we were able to generate positive cash flow from operations in fiscal ’24.” — David Johnson .
  • “Gross margin in the fourth quarter was negatively impacted by increased promotional pricing, changes in product mix toward lower-margin products and increased inventory reserves.” — David Johnson .
  • “We are taking our innovation approach to the next level… strengthening our consumer-centric innovation approach… launches in Fishing (XPLORE and MEGA Live 2), Watercraft, Jetboil.” — Helen Johnson-Leipold .

Q&A Highlights

  • Gross margin decomposition: promotional pricing ~2.5 pts; mix ~2.5 pts; inventory reserves ~1 pt; total ~6 pts lower YoY in Q4 .
  • Operational savings: ~2 pts GM benefit in FY24; program expanding (sourcing, factories, logistics); Q4 job eliminations will help OpEx run-rate .
  • Retail inventory and ordering: mixed by channel; pockets in good shape; others elevated; retailers remain cautious .
  • Innovation and resourcing: emphasis on consumer insights and dedicated talent; quality-focused launches (MEGA Live 2, XPLORE; Jetboil; Water Rec) .
  • Tariff risk: monitoring potential 2025 actions; preliminary mitigation strategies considered based on prior experience .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable due to SPGI daily request limit. As a result, we cannot provide beat/miss comparisons to consensus for this quarter. Values retrieved from S&P Global were unavailable.
  • Given sharp Q4 margin compression and the Fishing goodwill impairment, analysts may revisit margin and operating expense assumptions; management cautioned that competitive and promotional pressures will persist near term .

Key Takeaways for Investors

  • Severe Q4 margin compression and impairment overshadowed a YoY sales uptick; focus near term is on cost structure and margin repair while maintaining innovation spend .
  • Balance sheet strength provides downside protection and optionality: $162.0M cash/investments and no debt; dividend sustained, signaling confidence in liquidity .
  • Inventory reduction (~$51.7M YoY) and positive FY24 cash from operations are tangible execution positives that can support FY25 working capital normalization .
  • Competitive intensity and promotional mix are pressuring gross margins; watch for efficacy of sourcing/factory efficiency programs and product mix improvements to stabilize margins .
  • Innovation cadence (Humminbird MEGA Live 2, XPLORE) and go-to-market restructuring are key to reigniting demand, especially in Fishing and Watercraft; track sell-through vs. sell-in in early FY25 .
  • Macro/tariff watch: potential 2025 tariff actions could affect imported components; management is preparing mitigation strategies—monitor policy developments and COGS sensitivity .
  • Near-term trading: risk skewed to margin headlines and promotional cadence; medium-term thesis rests on innovation-led recovery and operating efficiency gains backed by a strong balance sheet .

Sources: Q4 2024 earnings call transcript ; Q4 FY24 press release and 8-K (Item 2.02; Exhibit 99.1) ; Dividend press release ; Q3 FY24 press release/8-K/call ; Q2 FY24 8-K/call .