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Vista Outdoor Inc. (VSTO)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 FY2025 results were in-line with internal expectations: Sales $666M, Operating Income $66M (9.9% margin), Adjusted EBITDA $111M (16.7% margin), Diluted EPS $0.71, Adjusted EPS $1.03; Board emphasized pending separations (Kinetic to CSG; Revelyst to SVP) and ISS support for the Kinetic deal .
  • Revelyst exceeded expectations with sequential profitability improvement: Sales $315M, Operating Income $21M (6.6% margin), Adjusted EBITDA $38M (12.1% margin) as GEAR Up realized $11.6M cost savings in H1; inventory reduced $87M YoY and $22M sequentially .
  • The Kinetic Group remained best-in-class on margins but faced input cost headwinds: Sales $351M, Operating Income $87M (24.8%), Adjusted EBITDA $94M (26.7%) amid higher copper and powder costs; secured VA and Federal Reserve Bank contracts .
  • Balance sheet strengthened: Net debt fell $26M QoQ to $553M (1.3x net leverage); cash from operations YTD $81M and adjusted free cash flow $111M .
  • Guidance withdrawn due to pending transactions; no Q2 earnings call held. Near-term stock reaction likely tied to deal milestones, approvals, and separation timing rather than fundamentals .

What Went Well and What Went Wrong

What Went Well

  • Revelyst delivered sequential profitability improvement; Adjusted EBITDA more than doubled QoQ to $38M (12.1% margin) as GEAR Up cost savings accelerated ($11.6M realized H1; $25–$30M FY target). “We reaffirm our commitment to double Revelyst standalone adjusted EBITDA” — CFO Andrew Keegan .
  • Kinetic maintained premium margins despite headwinds: Adjusted EBITDA margin 26.7%; won key contracts (Veterans Affairs and Federal Reserve Bank) and highlighted strong product portfolio and brand strength .
  • Cash generation and deleveraging: YTD operating cash flow $81M and adjusted free cash flow $111M; net debt reduced to $553M and net leverage to 1.3x .

What Went Wrong

  • Consolidated profitability compressed YoY: Operating income down 13.3% to $66M; diluted EPS down 6.6% to $0.71; adjusted operating income margin declined to 13.2% .
  • Kinetic gross profit fell 1.8% due to higher input costs (copper and powder), and operating margin declined 163 bps YoY to 24.8% .
  • Guidance visibility removed with withdrawal of FY2025 guidance; no Q2 earnings call due to pending asset sales, limiting real-time commentary/clarifications for investors .

Financial Results

MetricQ4 FY2024 (Mar 31, 2024)Q1 FY2025 (Jun 30, 2024)Q2 FY2025 (Sep 30, 2024)
Sales, net ($USD Millions)$693.669 $644.181 $665.915
Gross Profit ($USD Millions)$220.507 $211.157 $211.429
Operating Income ($USD Millions)$62.531 $81.028 $65.725
Operating Income Margin (%)9.0% 12.6% 9.9%
Adjusted Operating Income ($USD Millions)$84.736 $85.785 $87.984
Adjusted Operating Margin (%)12.2% 13.3% 13.2%
Net Income ($USD Millions)$40.168 $57.120 $41.798
Net Income Margin (%)5.8% 8.9% 6.3%
Diluted EPS (GAAP) ($)$0.69 $0.97 $0.71
Adjusted EPS ($)$1.02 $1.01 $1.03
Adjusted EBITDA ($USD Millions)$109.220 $110.095 $111.377
Adjusted EBITDA Margin (%)15.7% 17.1% 16.7%

Segment breakdown

Segment MetricQ4 FY2024Q1 FY2025Q2 FY2025
Revelyst Sales ($M)$332.083 $274.000 $315.000
Revelyst Operating Income ($M)$12.082 $(2) $21.485
Revelyst Operating Margin (%)3.6% (0.6)% 6.6%
Revelyst Adjusted EBITDA ($M)$29.134 $15.617 $38.140
Revelyst Adjusted EBITDA Margin (%)8.8% 5.7% 12.1%
Kinetic Group Sales ($M)$361.586 $370.000 $351.000
Kinetic Group Operating Income ($M)$93.801 $104.396 $87.093
Kinetic Group Operating Margin (%)25.9% 28.2% 24.8%
Kinetic Group Adjusted EBITDA ($M)$100.266 $111.159 $93.756
Kinetic Group Adjusted EBITDA Margin (%)27.7% 30.0% 26.7%

KPIs

KPIQ4 FY2024Q1 FY2025Q2 FY2025
Cash from Operations ($M)$160.618 $53.765 $26.778
Adjusted Free Cash Flow ($M)$161.121 $69.809 $41.607
Net Debt ($M)$659.729 $579.019 $553.075
Net Debt Leverage (x)1.5x 1.3x 1.3x

Guidance Changes

MetricPeriodPrevious Guidance (Q1 FY2025)Current (Q2 FY2025)Change
Consolidated Sales ($B)FY2025$2.665–$2.775 Withdrawn Withdrawn
Adjusted EBITDA ($M)FY2025$410–$490 Withdrawn Withdrawn
EPS (GAAP) ($)FY2025$3.56–$4.46 Withdrawn Withdrawn
Adjusted EPS ($)FY2025$3.60–$4.50 Withdrawn Withdrawn
Cash from Ops ($M)FY2025$262–$343 Withdrawn Withdrawn
Adjusted Free Cash Flow ($M)FY2025$240–$320 Withdrawn Withdrawn
Effective Tax Rate (%)FY2025~25% Withdrawn Withdrawn
Interest Expense ($M)FY2025$30–$40 Withdrawn Withdrawn
Capex (% Sales)FY2025~1.5% Withdrawn Withdrawn
Kinetic Sales ($B)FY2025$1.425–$1.475 Withdrawn Withdrawn
Kinetic Adjusted EBITDA ($M)FY2025$350–$400 Withdrawn Withdrawn
Revelyst Sales ($B)FY2025$1.240–$1.300 Withdrawn Withdrawn
Revelyst Adjusted EBITDA ($M)FY2025$130–$160 Withdrawn Withdrawn

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 FY2024 and Q1 FY2025)Current Period (Q2 FY2025)Trend
Supply chain & operationsWarehouse consolidation (Reno closure), bringing in Chief Supply Chain Officer; progress on GEAR Up; Q1 noted order processing issues and Bushnell Phantom 3 GPS launch delay, with fixes implemented Continued GEAR Up execution; H1 realized $11.6M savings; inventory reduction $87M YoY and $22M QoQ at Revelyst Improving sequentially; operational efficiency gains accelerating
Input costs (copper/powder)Kinetic facing higher copper/powder costs; targeted price actions; anticipated broader increases; margins resilient Kinetic gross profit down on input cost inflation; margins strong but compressed YoY Persistent headwind; pricing/mix mitigation continues
Product performanceLaunch success at Foresight/Bushnell; Fox/Giro/Simms innovations; Q1 noted delay in Bushnell GPS impacting sales Kinetic highlighted premium product demand; Revelyst sequential EBITDA expansion from mix and efficiencies Mixed: outdoor tech momentum vs timing effects; improving profitability
Government/contract winsKinetic: SOCOM contract; robust government demand; Revelyst: Eagle/BLACKHAWK wins Awards from Veterans Affairs and Federal Reserve Bank to Kinetic Ongoing positive contract pipeline
Promotional environmentQ4/Q1: elevated promotions to reduce inventory; plan for reduced promotions in FY2025 Reduced promotion tailwind embedded alongside GEAR Up; profitability improving Less promotional pressure; margin tailwind
Strategic transactionsBoard engagement with MNC; reaffirming CSG deal confidence ISS recommends “FOR” Kinetic sale; schedule of special meeting; withdrawal of guidance due to pending sales of Kinetic to CSG and Revelyst to SVP Deal-driven narrative dominates; execution/approvals key

Note: Company did not hold a Q2 FY2025 call due to pending deals .

Management Commentary

  • “Vista Outdoor FY2025 Q2 Financial Results In-Line With Expectations: Sales of $666 Million; Operating Income of $66 Million… Adj. EBITDA of $111 Million…” — Press release headline summary .
  • Eric Nyman (Revelyst Co-CEO): “GEAR Up initiatives have now delivered $11.6 million of realized cost savings through the first half of Fiscal Year 2025… we expect… $25 to $30 million… positioning us well for the future.” .
  • Jason Vanderbrink (Kinetic Co-CEO): “Our Adjusted EBITDA margin outpaces the competition at 26.7 percent… We were recently awarded key contracts from Veterans Affairs and the Federal Reserve Bank…” .
  • Andrew Keegan (CFO): “We saw Revelyst inventory decrease $87 million year-over-year and $22 million sequentially… year to date cash provided by operating activities of $81 million and adjusted free cash flow of $111 million… net debt leverage ratio was 1.3x.” .
  • On guidance: “Given the recently announced sale of both The Kinetic Group and Revelyst… we have elected to withdraw our full year Fiscal Year 2025 guidance.” .

Q&A Highlights

Q2 FY2025: No call conducted . Key Q1 FY2025 Q&A themes:

  • Revelyst EBITDA bridge: GEAR Up savings ($25–$30M) plus April 2023 restructuring (~$10M), lower freight and reduced promotions to reach doubling target .
  • Gross margin trajectory: Expect improvement starting Q2 and sequentially thereafter as volumes recover and GEAR Up benefits flow through .
  • Specialty channel dynamics: Inventory overhang improving gradually; stronger mass/D2C performance; share gains cited in helmets, sportswear, launch monitors .
  • Product shipment issues: Bushnell GPS launch delay due to software; order processing frictions resolved; $13M of orders shifted from Q1 to Q2 .
  • Kinetic margins/pricing: Elevated commodities/powder; targeted price increases, broader hikes likely but market acceptance is a consideration .

Estimates Context

  • Wall Street consensus (S&P Global Capital IQ) for VSTO Q2 FY2025 and Q1 FY2025 was unavailable via our SPGI mapping during this review; as a result, beat/miss vs consensus cannot be determined. Management indicated Q2 performance was “in-line with expectations” in the press release .
  • If consensus becomes available, key comparisons should focus on consolidated Revenue, Diluted EPS, and segment EBITDA margins (Kinetic and Revelyst).

Key Takeaways for Investors

  • Transaction-driven catalysts: Guidance withdrawn; near-term stock performance likely tied to CSG/Revelyst deal approvals, timing, and any competing proposals (ISS support for Kinetic sale is positive) .
  • Revelyst turnaround gaining traction: Sequential EBITDA expansion, inventory down materially, and GEAR Up savings accelerating toward $25–$30M FY target — watch for sustained mid-teens margin path over time .
  • Kinetic margins remain strong but are sensitive to copper/powder costs; pricing/mix actions and government contracts support resilience, yet input inflation is a persistent risk .
  • Balance sheet improving: Net debt reduced to $553M and leverage to 1.3x; ongoing cash generation supports deleveraging into deal close windows .
  • Operational execution: Q1 shipment delays addressed; continued focus on distribution footprint consolidation and cost controls should underpin FY profitability .
  • Trading implications: With no Q2 call and guidance withdrawn, updates via 8-Ks/transaction filings will be the main narrative drivers; monitor regulatory approvals, special meeting outcomes, and any revised consideration disclosures .
  • Medium-term thesis: Post-separation, Revelyst strategic focus and GEAR Up efficiencies could unlock margin expansion and growth in DTC/digital gaming; Kinetic under new ownership may continue premium margin leadership.

Sources: Q2 FY2025 earnings press release and 8-K ; Q1 FY2025 8-K and call ; Q4 FY2024 8-K and call .