JOUT - Earnings call 4 2023 | Johnson Outdoors Inc.

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Operator

Everyone, and welcome to the Johnson Outdoors Fourth Quarter 2023 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 Pat to Please go ahead, Ms. Penman.

Patricia Penman

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

If a today's copy news available it is you our Investor website Relations. need on at of release, johnsonoutdoors.com under

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

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

Helen Johnson-Leipold

Thanks, for will outlook and with questions. joining the quarter we'll a and Pat. on and fiscal businesses. the our then us. thank highlights, and results, year perspective you and overview of begin I'll an performance I'll review share your morning, financial for Dave everyone, Good then fourth take

and year. million profit from XX% impacting per million increase operating year, significantly profitability. diluted the versus income the prior challenging the That, to fiscal XXXX, fiscal with $XXX.X to inventory the sales decreased combined for the years. of or XX% in higher prior for the the Net compared led we past end prior a saw the of at share, year. $X.XX During volumes XX%, $XX.X million few in year year sales $XXX.X results XX% declined demand the decrease was $XX.X with fiscal the year. in elevated Total expenses pandemic-driven to million decline levels Operating million company in retail fiscal $XX.X

comparison were compared Our fourth year in a $XXX.X million $XX.X million fourth by in quarter quarter. eased significant quarter fourth last September fiscal restrictions we also in prior quarter quarters. between filled demand. significant and chain XXXX a fourth of was of slowdown when when was to particularly reflect impacted backlog customer Sales XXXX supply a results quarter number The the orders. ending challenging The the

a tough So the patterns. demand a traditional outdoor order a we quarter marketplace the of pre-pandemic and and year moderated, see it in was return tough seasonality recreation also began as to to

a growth pricing. In the challenging be [ to affecting ] of marketplace, competitive continue dynamics

are will Looking we anticipate help committed these forward, and and continue, to our succeed. dynamics we grow to brands innovation

is position. In Fishing, key sustaining to our leadership innovation

all-new excited We new of seamless products a of restage look quarter ultimate trolling bow-mount the all a giving its the technology. and announced by anglers are trolling tough more the motors enhancements full fishing suite angler-friendly Humminbird brand-new Minn Kota environment. a updated of fiscal technology Kota also and brushless line QUEST third integration launched announced with with series, Minn technology, during year. motor in control the of we broad the a

We are fishing industry leaders.

that committed We great position to brands, and marketplace. retaining we're this have in

best We continue are will to to we work for the the new innovation anglers announced, give we breadth excited about of momentum the hard experience and fishing possible.

recover. markets, we our in dive global business, continued especially growth In markets European Diving positive saw to

will trusted the most our to ensure SCUBAPRO world's dive innovation named brand-building leverage be brand. will and We efforts

we leveraging X increase Eureka! the years, product brand over Jetboil few demand recently high announced franchise. has working on businesses Watercraft decline into still Our In Jetboil faced growth their the decision shelves pandemic exit strong inventory have our made we to has focus past past Retailers experienced growth Camping years. on slowed. and consumer opportunities. over and with tremendous the a our that significant the equity Recreation lines spending the tough to and fuel camping, expansive on we're

Old In the propel drive fishing Watercraft technology and the Old about Recreation, combines looking excited next ePDL+ cutting-edge power technology revolutionary a that to is the world, Town's we're soon. we're pedal level. experience new forward boarding to ePDL+ to This This and Town is power-assisted to pedal drive. shipping plus

on current results, While we're fiscal outperform year economic profitability softness. despite improve headwinds disappointed the challenging to our and in our laser-focused we're working to marketplace marketplace hard

consumers, our key growth our digital our of innovation and We will and new continually drivers, our experience. strategic continue consumer optimizing identifying leadership, sustaining to invest paths in understanding in sources markets,

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

the on turn call more details to I'll Dave for financials. the over Now

David Johnson

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

more transition. the tightly bow-mount Helen by new customers with impacted Fishing's at quarter as As mentioned, inventory motor fourth demand were slower retail and significantly results as inventory high managing well

from margin ] X.X% profit to operating in [ XXXX, was improved the fiscal the margin X.X% year. fiscal XX.X%, was Gross year. last fiscal slightly previous For year compared for

year, experienced offset reduced increases nearly volumes. we due inventory and by gains materials freight While in improved sales reserves absorption and to those costs versus last unfavorable were

result prior in a Operating entirely million market to $X.X million expense marketing Deferred expenses as offset assets or compensation year. increased the income. XX% of $XX.X was plan other and versus increased

expense related $X.X in We to recognized the also the exit of brand. million Eureka!

further development increased and experienced warranty and approximately million. marketing million and expense costs XXXX. higher expense costs we increase $X.X services versus higher fiscal Additionally, the operating of professional Research drove $X

The inventory of year and by see the the remains elevated flat as by XX.X%. last fiscal focused to carefully year. Inventory the navigate prior for prior challenging million levels year $XX.X income than and decline We're of was we'll is million. about $XX.X higher Net the at year on $XX.X rate managing was end million. year expect effective marketplace, tax versus inventory levels we a I fiscal

margins operating prudent strengthening with our focused savings an Looking on active management. ahead, program and cost we remain expense

enables consistently pay debt position out in to cash no deliver invest confident the to opportunities continues and value in Our to us our ability We and cash strengthen business. dividends our long-term our to shareholders. remain to balance sheet have

turn Now operator the session. to for Q&A the I'll

Operator

Our first from Anthony Instructions] question with [Operator comes Sidoti.

Anthony Lebiedzinski

Okay.

-- just guess, all first, of just in how a inventory better on at going brands? I Or in -- firstly, in it the your seeing of again, isolated guess, terms to of retail, terms the so understanding across wanted comment what's the marketplace. I more Just So you this get is to Fishing? are

Helen Johnson-Leipold

demand, varies We questionable bit business, inventory they is buyers our -- but slowing the do orders see play. little at it is that there down making a by retail about

the much across pretty is board. really the it think outdoor I in industry So

Anthony Lebiedzinski

it. Got Okay.

the current then the the you can first can quarter? And comment quarter, what given more X of fiscal year, Okay. that progression you monthly on sales than And months into throughout estimate share Just with better of to ballpark or kind quarter share, be or so you regards that us far? in it demand worse? great. would fourth could the Is to if you're similar

David Johnson

Yes. progressed, of of wound I season mean declined the kind down. it quarter the as kind

So should But to versus marketplace, be. traditional it go back we've probably will. really seen seasonal it it depressed if where is you

next seeing of kind So as a into we the challenging quarter, still marketplace. we're look

challenging. a for looks But So right pretty good we're season. it now, hopeful

Helen Johnson-Leipold

level which performance is really It's great through a and I got swing. hard more everybody it's it thought of the it, getting such now was -- We a does always to work season to -- period. think the swing energy post-pandemic. had But the but stable predict to coming. have of it's It's we we've that the need. It's back in market, a hopefully,

Anthony Lebiedzinski

past the let's look you at say, back you guess, fiscal season, numbers and then March should with said, are like saw Is and of kind will to getting June where fiscal December -- like we 'XX pandemic, and 'XX that we dropped the the I how in that the see now? basically our quarters. has in that go we're of had, fair September big now demand 'XX ] quarters back So off. that Is and beyond? the you what fiscal like seasonality or like and look models seeing mean so I [ assessment things really the you're and a revenue shoulder

David Johnson

Yes. high quarter we year's And to believe back yes. the last as business, really [indiscernible]. out, fourth of get to I traditional we'll due was seasonality pointed

back get a of apportionment traditional the more season. of we'll to So

Anthony Lebiedzinski

Dave. Thanks, Okay.

Kota in for come the So lines Old for think product should those? already orders mentioned you Minn Town. about from and Or we Have new purchase how you seen guys that?

Helen Johnson-Leipold

that's orders -- that. on Yes. have But I get as -- to shelf, have key traditionally we've through inventory pre-season. a we mean move we they've got got do the and our we said, customers -- the

now. say we come would the that that is see we are they've will it inventory moves and orders through to and hoping But due in. got them I seeing uncertainty in those So we're the

Anthony Lebiedzinski

can on then And inventory hear. to quarter, that? comment you of fourth on impact good terms That's margin, reserve the the Okay. in so gross

David Johnson

Part was Eureka! due we were decided but to also to Yes. inventories looking levels. take it and our of across business, the the reserves of some to just the the exit at board,

now So increased the I salable. We across some we reserves that good the have we level of and mean, inventory -- that feel took it's I board. just about kind

Anthony Lebiedzinski

Got you.

Okay.

So overall, there of inventory in obsolescence ] [ terms risk? as much

David Johnson

and a I to to expect, have levels be consumer down. that. able those we season as in get if we we think behaves okay marketplace that expect, the the have obviously as shape. But long We As inventory we'll we're do

Anthony Lebiedzinski

you. Got

about a back, when Eureka $X the was charge. like It you Okay. talked And it then look million Is so million you announced $X.X exit, I that correct? instead. looks

David Johnson

just the inventory. of was million donation Yes, actually hit -- -- operating it line. $X.X was effect. expense that operating And of No, expense the of a inventory contribution part that was

is rest the in margin. So the gross

Anthony Lebiedzinski

right. Okay. All

it. So okay, was overall, okay? there so Eureka, impact Got the from gross some margin,

that? out are Any Okay. higher guys way higher that expect costs. And then we 'XX? And something you should these you other marketing do called costs also R&D, you in can warranty and fiscal quantify also think

David Johnson

I to think normalized is a level. the back getting expense warranty

was I to increase. a of I don't increase So bit that's -- a sales of a and would forward. that think I that move bit going was little level that -- onetime -- off little expect

marketing we we'll to keep expense, our viability maintain think ad our So make we'll I expense, investing think that promo the something and there. I market share sure the to continue there that's --

think that will I remain So invest will continue there. that to elevated and be something we'll

Helen Johnson-Leipold

from a -- pricing we've from and a -- -- marketplace, compete competitive and to promotion a that standpoint this the sure promotions make we're investing we has do been in consumer very got standpoint. We we're

Anthony Lebiedzinski

you. Got

couple quick if just I may. Okay. And other questions, a of

as us cost as profitability your then a trying to the how savings more, you should -- we about you that, that So bit talked that program the we if just details as some maybe should little first, of savings impact give what result think on [indiscernible] side? how on the I guess, And as a about think cost far do to defined you're could about that?

David Johnson

Sure. got and supply we've like I cost Most I we going into is good it's said, And on into intentional, focused some feel year program the us for chain. and I fruit future. broad fiscal an that in about it mean this it's product intentional to this think going bear and year. savings the of cost

help it product continue margin. will meaningful in the there way, prudent expenses, got And efficiencies We'll that it out. gross sure and enterprise looks to just to the too. look make we've for see our at throughout hopefully, with also So help cost but and play we're will a beyond expenses

Anthony Lebiedzinski

do 'XX? for lastly, estimate F for you. you And CapEx have Got an

David Johnson

to I think comparable it will 'XX. be

Operator

Johnson-Leipold to [Operator I for Helen would further time. this like back no showing I'm questions to remarks. closing turn at the call Instructions]

Helen Johnson-Leipold

you thank holiday. hope day. joining, has all great Thank a to want and Just Have happy a you. for everybody I

Operator

your Thank the conclude does in program. you This participation conference. today's for

You may now disconnect.

Johnson Outdoors (JOUT) 8 Dec 232023 Q4 Earnings call transcript