Vista Outdoor (NYSE: VSTO) reported Q3 EPS of $1.03, $0.38 better than the analyst estimate of $0.65. Revenue for the quarter came in at $575 million versus the consensus estimate of $520.13 million.

For the third quarter ended December 27, 2020:

• Sales increased 35 percent to $575 million, compared with the prior-year quarter.
• Gross profit rose 84 percent to $163 million, compared with the prior-year quarter. Gross profit margin improved by 750 bps compared with the prior-year quarter.
• Operating expenses were 16 percent of sales and improved by 11 bps when compared with the prior-year quarter. Adjusted operating expenses were 16 percent of sales and improved by 68 bps when compared with the prior-year quarter.
• Earnings before interest and taxes (EBIT) increased to $87 million, from $19 million in the prior year quarter. Adjusted EBIT increased to $73 million, from $19 million in the prior year quarter.
• Interest expense decreased 33 percent to $6 million, compared with the prior-year quarter. Adjusted interest expense decreased 25 percent, compared with the prior year quarter.
• Fully Diluted Earnings per Share (EPS) was $1.31, compared with $0.25 in the prior-year quarter. Adjusted EPS was $1.03, compared with $0.21 in the prior-year quarter.
• Cash flow provided by operating activities was $307 million, compared with cash provided of $63 million in the prior-year period. Free cash flow generation was $294 million, compared with a use of cash of $46 million in the prior-year.

"Continued strength in outdoor recreation markets, combined with our ongoing focus on execution excellence, resulted in strong top and bottom-line growth across the entire company," said Vista Outdoor Chief Executive Officer Chris Metz. "Strong outdoor participation trends that began in the early days of COVID lockdowns have continued into calendar 2021 and do not appear to be slowing down. Our integration of the Remington brand is ahead of schedule and delivered better than expected performance in the quarter. This week we successfully completed a tuck-in acquisition of Hevi-Shot Ammunition, which will immediately add a high-end offering, specialized lead-free ammunition capabilities and another iconic brand to our ammunition portfolio. Looking ahead, our focus will remain on employee safety, compliance with COVID protocols and doing our part to fulfill our critical duties and outfitting our consumers for their next adventure."

GUIDANCE:

Vista Outdoor sees Q4 2021 EPS of $0.55-$0.65, versus the consensus of $0.45. Vista Outdoor sees Q4 2021 revenue of $510-530 million, versus the consensus of $502.39 million.

"The growth of our free cash flow fuels our ability to accelerate our innovation pipeline and brand leadership, invest in our centers of excellence and generate growth through thoughtful, aligned tuck-in acquisitions," said Sudhanshu Priyadarshi, Chief Financial Officer of Vista Outdoor. "We believe this approach strikes the right balance between profitable growth and fiscal discipline. Further, we intend to maintain a long term 1-2 times leverage ratio."

Based on results to date, the current market environment and typical seasonality, Vista Outdoor's outlook for fourth quarter Fiscal Year 2021, which includes Remington and Hevi-Shot, is as follows:

• Sales in a range of $510 million to $530 million
• Earnings per Share in a range of $0.55 to $0.65

FY21 guidance does not include the impact of any additional future strategic acquisitions, divestitures, investments, business combinations or other significant transactions.

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