JOUT - Earnings call transcript Q2 2021

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Operator

Hello everyone, and welcome to the Johnson Outdoors Second Quarter 2021 Earnings Conference Call. Today's call will be led by Helen Johnson-Leipold, Johnson Outdoors' Chairman and Chief Executive Officer. Also on the call is, David Johnson, Vice President and Chief Financial Officer. [Operator Instructions] This call is being recorded.

Your participation implies consent to our recording this call.

agree terms, not the drop do line. you to simply these off If like call turn Penman would to I now the Outdoors. from over Johnson Patricia to Please go ahead, Ms. Penman.

Patricia Penman

our you Good XXXX the Quarter. joining everyone. you. Second Johnson Thank Thank us Results morning Fiscal for discussion for of Outdoors for

statements performance. If a assumptions this forward-looking statements need events filings also to today's with and our are you of Outdoors' not that guarantees copy made news and a uncertainties available contain it is Securities are I you to our Investor the website risks basis These differ of current factors those Relations. in call the Commission. future include from need conference These statements. release beyond listed Johnson may Actual and on views control. at of press materially of and number Exchange release, johnsonoutdoors.com on under remind many may due and our those

questions please to following over Johnson-Leipold. turn Helen If pleasure you to the the my Johnson have contact or It now call, additional call is me. Dave

Helen Johnson-Leipold

and and morning quarter. primary retail outdoor businesses. in will has in and But and resulted then of thank year preseason pandemic take products, outdoor we'll demand selling season. the year-to-date for ramp the review six share fiscal selling through our high financials our Historically, and first for has is the ongoing for the I'll and begin unprecedented joining activities Good months fiscal interest second continued the our that with the impact an results Pat. up Thanks, the I'll increased on the and COVID-XX then perspective recreation of quarter outlook period us. for overview performance of you key Dave your questions.

remained fiscal profit year. the Total with mark same deliver of the $XXX.X XX.X% surged results fiscal operating six-month demand to a operational at XX% at the company quarter during second year. year sales period $XXX.X same Total As halfway $XX.X last these compared allowed year company ago. increase XX% million, strong, year-to-date a increased sales consumer stand to ahead over company to a million period ago. million and Strong both customer efforts

the take second has participation heightened In been market-leading Minn Kota Johnson higher leveraging demand been the at advantage fiscal financial the participation And always and innovation. through Robust Fishing, for the discuss versus in million catalyst of outdoors. and the Hummingbird total $XX.X detail was largest call. during For from the as pandemic. in pandemic our but technology for most get in as or activities of Outdoors experience both quarter. people our diluted seasoned for profit previous the drivers later in this share. operating was year's Dave income even quarter, second $XX.X been brands portfolio and Net as profitable The quarter, has been high $XX new by possible. will $X.XX able the and million interest fishing quarter per continued it's looked to to grown, we've anglers outdoor business, key has million a best

a of innovative resolution them be Humminbird's product the MEGA Fishfinders, With imaging trusted the trolling with anglers' to Plus seeing of We're only in the the to also to motors. side latest catch leader Hummingbird's sonar anglers variety coverage Sales coverage, Imaging providing continued provides strong ensuring the and continues any fit unmatched screen Minn well and fish. there looked new can to detail in found with with needs. XXX be Helix is a a across view Imaging the impress that and high Kota sizes, Helix as as success depth the to quality success more range with and XXX-degree Minn innovation option Extending Kota MEGA durability, as all MEGA continue as Plus. award-winning industry areas, brand imaging, lines, technology expanding help and anglers generation

and award-winning in evolving the continue knowledge consumers, was hasn't down of of into Watercraft our kayak needs insights Sportsman line as This and We leadership those the reducing critical for Eureka! in taking products sustained to great looking year. made. to to maintain the in the portable Diving, a has and dive Kayak. technology and our innovation Minn world. everyone backpacking steps translating drive upon building in we've sustain business camp our certain Jetboil a with all-in-one more travel trail its know-how will continues weight with as Watercraft excitement Fishing we're as Salty for From countries good the product leader trusted year, camping to tents to during systems day audience people market, Stash know grow. in offers while along Enthusiasm pipeline paddle-powered year, people and and new lockdowns AutoPilot get to ongoing the success. Recreation, to strengthen promote outdoors. with enjoy great system line system position to the ever launched enhancing to invest local this our XXX and and new slowed cooking the cooking technology consumers' fishing of that European to coupled our market. innovative Fishing earlier work continue continuing are continues to of presence will SCUBAPRO's and support stove. the Sportsman in diving Kayak that These spend And versatile our bigger more Since to broader understanding Motorized expanding challenging segment diving to for time is e-commerce. time simplify to strengths, the the restrictions expectations. technology for last and Sportsman expectations has out outdoors fishing and lightest for We key position taking in In exciting stove be to our seen and Innovation ways outdoor brand the look In technical Jetboil pedal all our brand digital demand new Stash launch from all the is on new efforts been continue to lightweight our consumer experience impact to water Hummingbird's hard Diving better backpackers. work super eager especially our this fishing websites off the pay this kayaks globally most seeing Kota we're is

leadership, to consumers strong new Watercraft Recreation is to consumer, as strategic Longer and the our consumer and in remain demand our sources Looking identifying research key more ahead, and purchase drivers, term, our growth paths with experience of pace near-term Fishing sustaining Camping. optimizing markets digital focus we committed and our in in keep online. our understanding innovation investing

Our ongoing XXXX portfolio ensures profitable we and hard-work Johnson on for that is long-term success deliver that growth these continue brands of for sustained in our market-leading to Outdoors. priorities well positioned

highlights. Now I'll review turn a the financial call over to Dave of for the

David Johnson

Thank you, everyone. Good Helen. morning

lean. period second our dynamics strong and in another and market As inventories businesses three four unprecedented was sales quarter strong with Helen of retail mentioned, the with

excellent quarter. sales profits during performance key in the Our driver was increasing the

raw for million higher higher effective XX.X% gross costs from up rate between materials tariffs driven to in compensation in for $XX.X margin down Net and variable $X.X the offset income is compensation year increase expenses compared as due and for Deferred quarters. last overhead the of versus For million in were XX.X%. million and year-to-date as valuations million quarter $XX.X expenses expenses year higher fiscal well primarily XX.X% prior expenses increased absorption rate deferred compared to quarter quarter volumes. slightly the as offset the prior freight tax $XX.X The was $X.X quarter. benefits by were the was million, XXX% other quarter year's Operating higher a of income. second to sales-driven favorable

expect full tax in We mid-XXs. to year rate the be the

dynamics. anticipate the many to we we'll continue monitor ahead Looking season strong a marketplace and

time, of cost increases. While material margins at pressured; our impact goods our from will don't expect cost be on a this we

strong to remains out cash us financial strengthening dividend cash balance in shareholders. Our healthy our to our is and capacity position strategically pay sheet invest the a and continuing while flexibility to the providing business

the the Q&A to session. over call back for Operator? turn the I'll operator Now

Operator

from [Operator Anthony our line comes from first Instructions] question of the Sidoti. And

Anthony Lebiedzinski

Yes, good morning and thank you for taking question. the

at particular others? inventories are So that levels the across first Is or just retail inventory you lean. the is look are board, there think Dave when if at your than you you retail area where leaner the that said wondering segments one

David Johnson

I characterize seeing still very the businesses growing inventory board. Yes. that would three the retailers that lean are across are the

those So, I three businesses. think distinction any among there's don't

Anthony Lebiedzinski

it. Got

working Okay. obviously And demand so to is then and you capacity. that mentioned high increase --

your with give you in here? increase where your as terms capacity what a capacity we And to sense are us look should of can now? you ability to from So

David Johnson

way in helpful. shifts we're Yes. I been kind a our product factories where season very mean for we of added early that's set we're and building where to the

lot Of well. that a labor which seasonal we've course, its done as adding has but challenges of

fast short-term And the pulled. to can two kind demand as as working those we're are we the So, now. meet right levers of we've that

Helen Johnson-Leipold

at being just that in COVID going mind terms and of the plant rules able we keep still are And XX% all workforce are on. have like because of the in that to safety to in the our

more ability we So hope if staff things we change can cross during shift. the our the fingers will have to

Anthony Lebiedzinski

Got it.

Okay. Thank color. for you the

better the of Can constraints X chain of chain as end certainly now same supply you publicized. May XX in at you on that terms have things quarter terms gotten look to well us or So, give March as in sense the the a been constraints? supply have worse or versus

David Johnson

electric Yes. sure Anthony mean we I make right adequate We're dynamic hard it's have in. say supply. I working coming to would very now. pretty components

and done so in times. shortages But a here heard, industry sure you we've there the as of I lead far and think job longer out maintaining there I'm there good that. are

balance And So, sure still hard can maintain it's right I that would supply. a we we're delicate say, working to pretty very now. make

Anthony Lebiedzinski

Got it.

And me from Okay. I then here. lastly, guess

the ability how of about as higher -- as So offset cost are Whether mitigation increases the you or strategies? we your some maybe costs? thinking anything those else price should think far to about

David Johnson

I Yes. we increases. innovation we I product bring we'll to our definitely mean help the think out the mitigate programs the cost options all Sure. that's price equation. marketplace savings of into important. part are consider all How Cost

for at look options that. we'll So all

Anthony Lebiedzinski

it. Got

best luck. and you of thank well and Okay

Helen Johnson-Leipold

Thank you.

Operator

there And questions further queue. in no are

this at would to turn time Helen So over Johnson-Leipold. it like now back I to

Helen Johnson-Leipold

you a great everyone we joining you. day. for and Thank Thanks have us hope

Operator

today's conclude does This conference.

all may disconnect. You now

Johnson Outdoors (JOUT) 9 May 212021 Q2 Earnings call transcript