Vista Outdoor (NYSE: VSTO) reported Q4 EPS of ($0.22), $0.07 worse than the analyst estimate of ($0.15). Revenue for the quarter came in at $571.23 million versus the consensus estimate of $519.53 million.

Fiscal Year 2018

For the fourth quarter ended March 31, 2018:

• Sales were $571 million, down 1 percent from the prior-year quarter. The decline was caused by lower prices across all ammunition categories due to market conditions in the Shooting Sports segment, and lower sales in hydration, optics, and water sports in the Outdoor Products segment. These declines were partially offset by increased firearms sales due to a product refresh in Shooting Sports and improved sales in outdoor cooking and Sports Protection product categories.
• Gross profit was $109 million, down 24 percent from the prior-year quarter. Adjusted gross profit was $112 million, down 22 percent. The decrease was primarily caused by unfavorable pricing in all ammunition categories, increased promotional activity, and rebates within the Shooting Sports segment. These decreases were partially offset by favorable volume, product mix and cost savings within Outdoor Products.
• Operating expenses were $125 million, compared to $130 million in the prior-year quarter. Adjusted operating expenses were $123 million, compared to $129 million in the prior-year quarter. The decrease in operating expenses was driven by lower expenses for customer collections compared to the prior period and cost savings initiatives, partially offset by increased incentive accruals.
• Interest expense was $12 million for the quarter, compared to $11 million in the prior-year quarter. The increase was caused by a higher average borrowing rate, partially offset by a lower debt balance.
• Tax rate was 42 percent, compared to 71 percent in the prior-year quarter. The adjusted tax rate was 46 percent, compared to 56 percent in the prior-year quarter, primarily caused by lower operating earnings in the current period.
• Fully diluted earnings per share (EPS) was $(0.28), compared to $0.02 in the prior-year quarter. Adjusted EPS was $(0.22), compared to $0.03 in the prior-year quarter.

Outlook for Fiscal Year 2019 "Fiscal Year 2019 will be an inflection point for our business, and our financial guidance reflects this reality," said Metz. "Increased commodity costs and lower volume will pressure both segments in the first half, and higher interest expense and unfavorable tax rate will pressure earnings for the full year. In response to these challenges, the company has taken several cost reduction actions and initiated targeted price increases, and we anticipate further actions if commodity pressures do not abate. As we move through the year, we anticipate sequential, quarter-over-quarter improvements in our gross profit percentages as a result of our actions. Our strategic transformation into a consumer-focused, less complex, and more agile business will position us to unlock the true value of Vista Outdoor and its market-leading brands."

Vista Outdoor FY19 financial guidance:

• Sales in a range of $2.205 billion to $2.265 billion
• Interest expense of approximately $55 million
• Tax rate reported and adjusted of approximately 30 percent
• Earnings per share in a range of $0.10 to $0.30
• Capital expenditures of approximately $60 million
• Free cash flow in a range of $55 million to $85 million

GUIDANCE:

Vista Outdoor sees FY2019 EPS of $0.10-$0.30. Vista Outdoor sees FY2019 revenue of $2.205-2.265 million.

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