Johnson Outdoors (NASDAQ: JOUT) reported Q2 EPS of $2.02, $0.42 better than the analyst estimate of $1.60. Revenue for the quarter came in at $163.1 million versus the consensus estimate of $161.37 million.

SECOND QUARTER RESULTS

Sales in the second fiscal quarter reflect shipments in anticipation of the primary retail-selling period for the outdoor recreation industry’s warm-weather products. Net sales decreased 8 percent to $163.1 million in the current fiscal second quarter compared with $177.7 million in the previous year quarter. Government-mandated “stay-at-home” orders resulted in temporary suspensions across Company operations around the world during the quarter and were a key contributing factor to the year-over-year unfavorable comparison in total Company net sales. While each unit experienced a different degree of impact from COVID-19, other factors affecting unit results were:

• Fishing revenue declined 3 percent to $134 million due to the pacing of new product introductions in the prior year quarter.
• Camping sales decreased 7 percent to $8.8 million as strong growth in Jetboil® could not offset lower sales in other categories.
• Diving revenue dropped 29 percent due to the impact on dive markets across Europe, Asia-Pacific and North America as a result of the COVID-19 pandemic.
• Watercraft Recreation sales fell 38 percent due largely to COVID-19 impacts on production and demand.

Total Company operating profit in the fiscal second quarter was $31.8 million compared to $27.8 million in the prior year fiscal second quarter. Gross margin improved to 46.1 percent from 44.5 percent, due primarily to stronger pricing and improved mix in the current year quarter. Operating expense declined $7.9 million driven primarily by a $5.5 million favorable impact from valuation adjustments to the Company’s deferred compensation plan assets, which are totally offset in Other Income, and a $3.4 million reduction in incentive compensation costs. Net income was $20.4 million, or $2.02 per diluted share, in the current quarter versus $21.9 million, or $2.18 per diluted share, in the previous year quarter.

“During this unsettling time, we are taking steps to protect the health and safety of our people and ensure the future for Johnson Outdoors. Government mandates in response to COVID-19 have overlapped with our primary selling season, and the third quarter is expected to be significantly impacted as a result. However, as stay-at-home orders are lifted, Johnson Outdoors will be there ready to help people have a great outdoor experience,” said Helen Johnson-Leipold, Chairman and Chief Executive Officer. “Importantly, our unwavering commitment to building a thriving enterprise long-term remains stronger than ever. Now, as always, consumer-driven innovation will play a critical role in helping us overcome challenging times and emerge stronger and better positioned for the future.”

“We have cut travel and non-essential spending, deferred capital expenditures and are working to scale operations consistent with demand. In addition, the Board of Directors and Executives have voluntarily taken reductions in pay,” said David W. Johnson, Vice President and Chief Financial Officer. “Looking forward, our debt-free balance sheet remains strong, and our healthy cash position will be beneficial as we work through challenges ahead, while continuing to make smart investments in strengthening the business and driving value for our shareholders.”

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