Johnson Outdoors Stock Plummets on Severe Q4 Earnings Miss
Company reports a staggering 1200% EPS miss and a 23% revenue shortfall, citing market headwinds and a significant non-cash impairment charge.
Shares of Johnson Outdoors Inc. (NASDAQ: JOUT) fell sharply after the company reported startlingly weak fiscal fourth-quarter results that missed analyst expectations by a wide margin. The outdoor recreation equipment maker posted a loss per share of -$2.83, a figure that dramatically underperformed the consensus estimate of a $0.24 profit.
Revenue for the quarter landed at $135.8 million, falling 23.1% short of the $176.6 million analysts had projected. The dismal results reflect a challenging year for the company, grappling with what it described as persistent market uncertainties and cautious ordering from retailers.
A significant factor in the quarter's net loss was a non-cash goodwill impairment charge of $11.2 million within its Fishing segment. According to the company's most recent 8-K filing with the SEC, the quarter was also impacted by increased promotional pricing and higher reserves for bad debt.
Helen Johnson-Leipold, Chairman and CEO of Johnson Outdoors, acknowledged the difficult environment. "Fiscal 2024 was a tough year, with continued challenging marketplace conditions and competitive pressures," she stated in the earnings release. Johnson-Leipold added that the company is "not seeing indicators that these challenging conditions will subside soon," signaling a difficult path ahead.
The company’s performance comes as the entire outdoor recreation industry navigates a complex post-pandemic landscape. While the number of participants in outdoor activities remains higher than pre-pandemic levels, the surge in demand seen during lockdowns has normalized. This has left many retailers with elevated inventory levels, forcing widespread promotional activity that puts pressure on manufacturers' margins, a trend that directly impacted JOUT's bottom line.
For the full fiscal year, Johnson Outdoors saw total revenue decline 11% to $592.8 million from $663.8 million in the prior year, with sales falling across all product categories. The company reported a full-year operating loss of $43.5 million.
Despite the steep losses, management pointed to a position of underlying financial strength. In his commentary, CFO David Johnson emphasized the company’s strong, debt-free balance sheet, which includes $162.0 million in cash. "We have been aggressively leaning into our critical strategic priorities: innovation, our go-to-market strategy, and operational efficiencies," Johnson-Leipold noted, suggesting a focus on long-term stability. The firm's successful efforts to reduce inventory by over $50 million year-over-year allowed it to maintain positive cash flow from operations.
Investors will be watching closely to see if Johnson Outdoors' strategic initiatives can right the ship in a market that continues to be defined by soft consumer demand and heavy competition. The company's ability to maintain its dividend offers a vote of confidence in its long-term financial health, but the near-term outlook remains decidedly overcast.