Vista Outdoor (NYSE: VSTO) reported Q3 EPS of $0.13, $0.07 better than the analyst estimate of $0.06. Revenue for the quarter came in at $581 million versus the consensus estimate of $565.63 million.

Outlook for Fiscal Year 2018

"Looking at the fiscal year, we are raising our free cash flow expectations and lowering our adjusted tax rate," said Metz. "Higher-than-anticipated rebate redemptions, aggressive discounts in certain products to maintain market share, the normal seasonality of our business, and the timing of expenditures will pressure earnings in the fourth quarter. As a result, we are reiterating our FY18 adjusted EPS guidance. The company is focused on cost reduction, margin expansion and cash generation to position us for future success. We are also committed to maintaining our leadership position in the marketplace. In response to significant commodities pressures, we implemented an ammunition price increase in early January and will take another price increase in April."

Vista Outdoor FY18 financial guidance:

• Sales in a range of $2.24 billion to $2.26 billion.
• Tax rate of approximately 55 percent, with an adjusted tax rate of approximately 22 percent.
• EPS in a range of $(1.00) to $(0.90), with adjusted EPS in a range of $0.50 to $0.60.
• Capital expenditures of approximately $65 million.
• Free cash flow in a range of $175 million to $185 million.
• Interest expense of approximately $50 million.

Highlights;

• Sales were $581 million, down 11 percent from the prior-year quarter.
• Gross profit was $126 million, down 25 percent from the prior-year quarter.
• Operating expenses were $107 million, compared to $553 million in the prior-year quarter. The difference was primarily due to a $449 million goodwill and intangibles impairment in the prior-year period.
• Fully diluted earnings per share (EPS) was $0.94, compared to $(6.44) in the prior-year quarter. Adjusted EPS was $0.13, compared to $0.62 in the prior-year quarter.
• Cash flow provided by operating activities year to date was $243 million, compared to $58 million in the prior-year period. Year-to-date free cash flow generation was $205 million, compared to free cash flow use of $18 million in the prior-year period.
• Tax rate was (725.3) percent compared to 4.4 percent in the prior-year quarter, driven by the revaluation of the deferred tax liabilities from the recently enacted tax law. The adjusted tax rate was 25.9 percent, compared to 33.6 percent in the prior-year quarter.

GUIDANCE:

Vista Outdoor sees FY2018 EPS of $0.50-$0.60, versus the consensus of $0.57. Vista Outdoor sees FY2018 revenue of $2.2-2.26 billion, versus the consensus of $2.25 billion.

For earnings history and earnings-related data on Vista Outdoor (VSTO) click here.