JOUT - Earnings call transcript Q3 2022

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Operator

Hello, everyone, and welcome to Johnson Outdoors Third Quarter 2022 Earning 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. Prior to the question-and-answer session, all participants will be placed in a listen-only mode. After the prepared remarks, the question-and-answer session will begin. is call This Instructions] being recorded. [Operator

implies participation consent to call. the recording our Your

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

Patricia Penman

for the Good third XXXX morning, us quarter. you Johnson of for Thank you. discussion Outdoors fiscal Thank joining everyone. our results for

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

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

Helen Johnson-Leipold

the fiscal will record financial year's third Thanks Pat. joining overview X, I'll year, questions. ending quarter highlights for the thank compared Good prior and an the our the share review with and outlook everyone, quarter quarter. and Dave I'll in perspective July to businesses. for declined and our your you on then then begin take on us. and morning, high Sales we'll XXXX third performance X%

net are third million of to period. operating company year-to-date last total up year's the pandemic significantly. quarter versus X% $XX.X nine-month sales declined Total our preprint XXXX period, over $XX.X down the year-to-date For period, the was nine-month for Compared gross company driven and record lower cost Year-to-date by sales profit decrease quarter. in increases particularly is The the compared declined to Fishing year's profit margin business. prior a the to sales in operating volumes also in period. our prior fiscal decline million setting due significant fiscal

price increases our we have where on and We our reducing possible. and fulfilling across lines expenses product focused implemented are demand

We from pandemic-driven past the to two the markets seeing seasons. are demand begin moderate of

while from persist. disruptions our trade solid chain partners continues demand global supply However,

is We challenges, important to our consumers. focus building can in fulfill and to that parts been and inventory have of anglers In in have build deliver strategically and to products product we the focus working new together customers. products invested not to as ways give that we and team to can Humminbird part complete as best wavering looking we work on are connect so new supply Fishing, our chain our maximize come some while possible. benefits from innovation for hard Kota An has orders fishing experience Minn

driven XX momentum high Award in awarded point XXth enjoy we new The a the for looking that to see Part to double-digit Town offers of wildly participation great Category our for as is consumers we use recent fishing, lakes remains waterfowl innovative Field category Ultrex was most exciting year's moderating Old to slower award well and superlight marking for hunting best the full Kota and innovation by season, of of market in MEGA market. catch moving Stash on versatile Imaging Sportsman TargetLock Minn Discovery This Our & year’s its Watercraft a last used canoe demand kayak Live Electronics for with rivers. captured recently Humminbird, stoves fishing Stream's TargetLock a trolling the fishing Imaging easier about specific line it prestigious target. MEGA Recreation, innovation XXX, everyone ICAST, and high on Sportsman camping trolling in line consumer enables the second steering and show the canoe more cooled unprecedented and for The the a enjoying XXXX. in Sportsman Solo on In control makes to while while and and to excited have strong year in great the in on growth. line. continue the Solo has world’s paddles at Live Eureka! and lightweight Sportsman compared most sonar motor conjunction a a water. for continue day MEGA Demand past this the In the this remain tents a solo is anglers years. Live Jetboil, like is market Watercraft Stove locking stay overall is independently Best technology, in in XXX motor Discovery the fish.

Dot fin new in and the conditions. The of for diving winner diving Supernova kicking more was travel experiencing for Supernova all and the Finally, are sustained enhancing digital our and go-to put global The dive hard markets product contributed professional powerful our recovery. power divers design. also brand control SCUBAPRO we've recreational in Fin. the to diving, innovation quarter, launched the and as seeking avid prestigious, local internationally-recognized growth. is in promoting Award Seawing consumers resume our has during maximum presence Recently, work supporting Seawing speed, Red The Supernova the

our the hard supply the and our at SCUBAPRO's position world. efforts Obviously, products. and long and we brands the next ensure for growth seek Our times, fulfill laser the summary, hard well Johnson we working remain on view long face conditions businesses as focused to we lead out In innovation the continued to economic Outdoors, loyal beyond who uncertain next dive or our position monitoring our most always, chain trusted in orders from disruptions working while will year. as take award-winning quarter are we brand customers

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

David Johnson

few items the from and highlight Good the year. to a Thank you, morning, wanted Helen. everyone. quarter I

year's but sales quarter, third record to higher declined are sales mentioned, than Helen quarter significantly quarter. XXXX pre-pandemic As June for high the the compared last

issues, being meet by ongoing We impacted position, supply but have our to is ability continue business. strong chain especially a Fishing our in order demand to

Now primarily several for The to higher demands for quarters. been we’ve million to in up last many is cost due year. meet is purchases $XXX help instances increase disruptions, supply to increased to Total inventory other building significantly chain material at in inventory mitigate an effort products. higher compared component levels increased raw and

our continue feasible. for We planning of vendors alternate for components supply sources with where closely critical work and of to all

with balancing margin balance quarter. last we will forward, is manage X.X demands Moving maintaining sales sheet. points XX.X% from third solid our inventory down position quarter's actively, gross year's a continue of to The

We experience cost of increases continue significant to in materials.

nine-month in XX.X% conditions offset other deferred plan expense quarter's $X.X year the deferred While cost Unfavorable enough sales product lines, resulted entirely the effective driven we've assets negative Operating expenses, market they the quarter. was and of in to expense. $X.X lower implemented lower between last primarily deferred component impact as volume were compensation price decreased a variable compensation quarter due not million million approximately company's The is rate the for in on period. impact quarter, This the year's well by of and compensation loss XX.X% lower expenses increases. as current quarter offset for prior income versus third was versus increases across quarters. year to tax the expense

value mid-XXs. income down the the of to $XX.X was in We consistently strengthen and from rate year’s be in cash opportunities sheet full-year In expect quarter $XX.X cash dividends enabled the tax us position balance Net the ability and our for have remain quarter million. invest the continue We to debt we to our to on deliver our to shareholders. confident prior long-term million closing, our in to business. no payout

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

Operator

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

Your ahead. line Please go is open.

Anthony Lebiedzinski

the Yes. questions. you and Good thank morning, taking for

more the you concerned first, And just board each – get strong wanted compared color Are a So to to your quarter? your also across more of what's it's orders. and and then wanted times segments? the just lead in far now last about is to as get as that your color backlog whether the are seeing I

Helen Johnson-Leipold

We our lead markets changed orders the the Have continued times seeing demand board. of some strong strong. see are but still quarter. are last customer We from from our do moderating, customers across

that's the pandemic? think of the think don't but And I Absolutely. the – not a I that's obviously challenges beginning increased from timeframe. when [indiscernible]. inventory causes they to that Have forecasting, levels comes it

solid orders we're continue in good Our we position. be to a and feel

Anthony Lebiedzinski

for Thanks that And sounds you're seeing much it. that. like Okay. cancellations. Is terms of not order it in then correct? Got really

Helen Johnson-Leipold

Yes.

solid have a and position seen fact in We order are as not just concerned. it's pretty far as orders cancels

Anthony Lebiedzinski

it. Got

whether what and how to you think margins? price the price increases, Okay. about in And then additional in the we and can you just review did terms quarter take increases you should overall, gross of plan

David Johnson

Yes.

in fiscal April the increases, price So sold. see, we it's increases to I increases year say another in the beginning our October. our in not took of cost beginning mean, Moderate from unfavorable just at price April. I enough of of the offset We as – you slog took hindsight. But goods would of variance

So we'll at continue that. look to

an of and where remains the the going just to quiver have to margin get but we the price to it's balance with back the think I forward, in needs products be to our be. to accessibility appropriately, continue arrow to that won't something it we need afraid gross

Anthony Lebiedzinski

it. Got

that assume near-term gross will pressure? remain to fair margins it is So under

David Johnson

us the Yes. look as expect soon. gross a we'll strategies and back at historic continue chain we've pricing better But sure that get got to supply at wouldn't as we that look situation have. I to well that to margins make

Anthony Lebiedzinski

it. Got

that's then to your a looks record now? it in like levels assume And which be high would a it's Okay. on, given reasonable going decrease inventory, everything when

David Johnson

back of if will. get to some has or semblance chain normalcy, you supply The Yes. to normality

we're managing that. So actively

industry more our but the chains get as normal back looking more next we're we get in to levels. think to go I little got to bit to to balance we into get season, supply the a try inventory,

Helen Johnson-Leipold

And orders of we meeting customers. are focused our on the

that have So is when fulfilling waiting this we focus available, right one so ready time. priority we're the or at but we for orders are two hopefully parts, our and are components on invested, key

Anthony Lebiedzinski

Understood.

And may Okay. couple here. a I questions, then if other of

have then what have increased year. fiscal your year? one next assume you left just And think ballpark would you kind for be for So only we if say estimate the mean, going have should year. your you would about to quarter CapEx in that? reasonable forward, It's of you CapEx. overall that for How I

David Johnson

We Yes. this in year. capacity invested

We'll reflected come for the back next number. that CapEx the have down year. but CapEx, the see for fourth increase expect quarter, to in I year we'll that's some So If more year levels a sense. any in that versus XXXX little last bit year-to-date still in to so investment makes

think So year of an this unusual I kind was year.

Anthony Lebiedzinski

absolutely. And have far you your capital you time. hear yes, sense, your it's love as a increases, are make dividend what then as thoughts any but thoughts may Yes. you've as a those of over done far good does on job that? That any updated to been done while as since allocation, which And would raising acquisitions, have

David Johnson

main remains mean, regard. acquisitions, kind a we'll to increase same, growth, important Yes. are look too. invest we see the of us alternatives And business going is is looking at as as strategy that capital other we if important mean, two I both too, in I that is to need remain year. the paying still internally solid are we to dividend capital at to our which strategy. next The in the look in dividend for regular well good utilize into continue but active for our we aspects. those very And

Anthony Lebiedzinski

Got and it. you Well, much of luck. thank All very best right.

Helen Johnson-Leipold

Thank you.

Operator

turn to conference showing I'm to no the any remarks. questions. I for And over further Helen And further you. back would Thank Johnson-Leipold like

Helen Johnson-Leipold

great thank Just everybody want have a us to day. and for joining

Operator

This you call. concludes participating. for today's conference Thank

now may You disconnect.

Johnson Outdoors (JOUT) 5 Aug 222022 Q3 Earnings call transcript