JOUT - Earnings call transcript Q2 2024

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Operator

Hello, and welcome to the Johnson Outdoors Second Quarter 2024 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.

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

Patricia Penman

Johnson you Good you. us discussion the quarter. morning, fiscal thank Outdoors Thank for for results and for joining our second XXXX of

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

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

Helen Johnson-Leipold

morning, for the in compared outlook year Good Dave provide $XXX.X an profit decreased in I'll the fiscal reported results X-month we million then more quarter. to the XXXX of questions. Sales The our and XX% and for financial fiscal your compared on quarter in year's joining to share giving of prior and by second business. second second loss addressing declined last quarter period. quarter. operating second operating XX% $XXX.X Pat. Thanks, to our prior company $XX.X thank begin $XXX,XXX over March million and year I'll then an and Year-to-date, sales review, performance, million the for perspective company everyone, the the you us. detailed will will take in

share the during second year-to-date $XXX,XXX the year's declined per diluted for $X.XX diluted million quarter an versus per $XX.X fiscal fiscal per of million or $XX.X period, income or the For previous for in $X.XX prior loss the operating $X.X X quarter. company period. Net Net compared versus share $X.XX million year-to-date second to period. to share total million income profit diluted share operating $XX.X prior first or or million diluted in year-to-date per months was $X.XX $X.X the was

marketplace Continued impacted our tough conditions quarter second results. significantly

in environment, the in pricing us term starting While to been continue midst improve, uncertainty time, have In categories challenges short critical increased navigate this inventory the long challenges to the and economic same expect we consumer our term. facing behavior, to across retailers season the continues and at competitive to buying of prioritizing actions. we levels in jump requiring for marketplace these investments additional activity position At the our ahead. promotion impact we in are businesses success

priority the to We are is in for to have these of in a categories, that categories. create possible. Innovation brands always key and looking growth. it strong experience best in the our strategic potential our products remains are and technology to that accelerate leaders as opportunities been outdoor marketplace the success We has and we delivers consumer-focused and believe

promotions which like Kota We trade. the motor new launches our trolling the Quest product from investing supporting marketing and in response line, are seeing new and Minn positive is

put opportunities. We evaluating efficiency additional profitability cost structure we place, and operations improving our business are a and cost in savings our are program also Strengthening critical focus. for

to inventory We more have to levels. been working hard reduce normal

growth of taking with improve in and the do, but continue starting and but profitable we to actions progress will market, we brands. in are, where are our a these invest to This have are lot our to more efforts. are to from we see time, satisfied is we a We work tough the not position long-term we

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

David Johnson

I second as impacted as Thank quarter. actions. morning, to few items you, promotional activity from for from Profits lower increases highlight were in pricing the volume everyone. by quarter well want reduced and and Helen, the good overhead absorption

to margins with program. to operating an continue improve steps active take our savings We cost

are We in and reductions have benefits efficiency gaining costs. in logistics our our driven factories

was year by to We incentive lower the promotional or primarily cost will quarters, spending. increased lower million volumes expense reduce expenses expand $X.X our to compensation and professional efforts expense services versus sales structure. Operating our decreased between X% partially due and offset prior and quarter

hard Helen we've our reduce As more inventory mentioned, working to to been levels. back normal

last $XXX.X December. from year's inventory $XX.X up March million, was down about as Our million but of quarter, million $XX.X from balance March

We fiscal expect the additional inventory reductions of year. throughout the [indiscernible]

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

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

Operator

Sidoti first line of & our Company. comes the from And question Anthony Lebiedzinski from

Anthony Lebiedzinski

directional your you some So how is trending progress perhaps from can And quarter to early comment an far? third quarter of maybe at least indication the so us how give us January first, maybe March? did give

Helen Johnson-Leipold

about, as good Well, last this by being are think but it's new quarter, accepted products our as the year, as good that not I we we [indiscernible]. talked feel

to think with better it's for and give We going got a going lot it's it's you can't But going I we continue I what's marketplace be and activity, challenging. a uncertainty But this as of both reflecting to happen -- season challenging competitive conditions challenging a said, of indication there's activity. season time, I is forward. consumer. to and going forward. of still as think said, the a early much hoping we're I an

continue. that's I So going to think

Anthony Lebiedzinski

just this What a that pull is your challenges uncertainty? is as had seeing of last the follow-up view pandemic? that the -- Or more about the you're because it And in on forward far macroeconomic business. more you. the part by Got as your driven during perhaps we just is

Helen Johnson-Leipold

the start outdoor a when we up combination across seeing about are which in on I that's of demand a -- think a the is trade, But a bit I I future we're lot clear pricing They've Well, I inventory It's putting the little that is the which, they gets -- forward the you're mean to of pull variables we think hopefully, so that get that's still is seeing specific think business stabilized. as over been up. will pandemic. think, but one and lot I into it's lot not depending state on mix, the clearing ordering. cautious I categories, think things, due all depressed. about. it through with talking an there's But hopefully you've reason, the of some of of to activities competitors also issue volatility are pressure a that and during situation, the the happened got

Anthony Lebiedzinski

Understood.

Okay. then the about ASPs? pricing unit volumes as just as And versus you as Got that reported, can quarter sense it. a you or us far give

David Johnson

and unit said discounting you. than precise more versus that that, So really affected the discounting was volume last we've depending top line that the on with the the year. activity line volume. But category, for more But else. affected top numbers I promotional have anything had, certainly, down having than unit don't

Anthony Lebiedzinski

Understood.

board? are you're as seeing far think you than levels said certain levels of seeing business starting the retailers? I that Or the your pockets Helen, that that as inventory are retail then, others across from And to at you inventory gets improve. Is Okay. the better

Helen Johnson-Leipold

for on I the think business it depends sure.

faster in better. depending moving inventory everybody were category, way think are high that I the some mean so working through their and But I has levels And the they on general, than will too recognized they're get it. others.

dealers. think I diving We've business our buildup in a little lagged. is got the some

But depends. general, ready isn't it over inventory in think have that again, season. go the So and are people issue with there the an I stock to

Anthony Lebiedzinski

Minn Quest to seeing hear. trolling motors, you response good talked And great which Kota from then about is

could existing So will incremental products? you your said, think we some being of I -- about do from should cannibalization that think do other you mean, product perhaps How see your be that? we line to lines? how Or this

Helen Johnson-Leipold

trade response good the oriented. is Well, really

But of did key season our is existing. this you've of was product target. through we Minn I or different think this a our And some restage in general as we cannibalization demand. that you this motor -- is some the tends that for line. to different whole restage always [indiscernible] coming innovation the Kota drive a whole because depressed a But assume innovation got

So I feel drive good incremental some sales. that should

Anthony Lebiedzinski

hear. to great That's

was what I Okay. for. looking That's

So thinking that to about about and promotional your it as near-term reduce and efforts programs your we should the inventory, think to longer-term profitability? relates how

Helen Johnson-Leipold

I heavily drive in which volume what Well, in And addressing should, end market. this you promotional and growing we're drives to the lot we the don't when fast, your promotion. and the the demand situation, there's normal I this a is what innovation is And -- competition. softer as think of market not spend. on has as times, have is rely -- up think think a sales But increasing it be to do I

So I It's it circumstances. we to at little do been that think will retail. takes given show just the we this movement drive heavier year what a

Anthony Lebiedzinski

you. Got

see it on basis. to but encouraging Okay, sequential is decline inventory the a

you program. progress there. can just guys then hope And switching I So further cost lastly make your savings to gears for me,

of like offset before think I that. to it and in pressure the helps some last So even the quarter, it points quarter sounds this

your baseball improving So are with I logistics. savings in about and to looking I terms, what inning I you factories that guess cost further what else guess maybe do at you savings? you in efficiencies cost look that program, the you as -- with talked to And guess gain But but at initiative? are

David Johnson

middle I we're Yes, it. think the of in

half are we football, use I'll So time.

this I continue improve and So started at to pretty X to look I mean profit X can ago, we how profile. -- we robustly our think yes, months we

So that continue. will

Helen Johnson-Leipold

about way. all are to savings. We're in looking of and a it's business. I a more we at other and heavy And But really valuating more focus. things at cost effective efficient look doing all efficient think Also, options the that's aspects being

is the marketplace, obviously, think to competition the pressures. increase continuing I

got the we've at we're And in process to look doing So of that. this.

Operator

Riley. Glaessgen And comes question the our B. of line from Anna next from

Anna Glaessgen

competitive a term? to respond helpful. levels? Do you Just more of new to there as and about for the super what's your a would respond to pricing. questions normal Is historical around kind this like outlook reversion you these to you But go when I'd some longer as thinking to of understanding to see we back have promotionality have margin back color think to be any activity competitors?

Helen Johnson-Leipold

I think not away. it going go is to

we've to some there rely think as we value a innovation, in price cost be drive will game for be a so in our promoting game. as during factor time the well. ball become up right promotions us. competitors are different But critical our got it's it And forward. key frame is It promotional promotion certainly become doesn't we've as to that on necessary the so but intense innovation got going But really us, I competition. for

Anna Glaessgen

And Got expect through retail, seemingly balance the it. at as do year? progressing you between greater positions expect and sell-through? do more Or sell-in a -- improving you inventory are balance how that

David Johnson

more I think over that seasons. become Yes, balanced would the

Just are remember, we seasonal.

quarter-by-quarter, out But improve. expect So definitely to change. it I yes, would as see inventories that balance does

Anna Glaessgen

Got on the inventory sheet, you're just one your trying work across The constant or it. down? that it Is any me. that segment concentrated for balance one to of And board? to last is is kind that

David Johnson

It's on across sales unit. the board the of based business the

inventory. obviously, So has the has got most their quarter. business. over been our inventory And reduce sequentially able is to It every Fishing business biggest the

Operator

comes of Gasiago from question next our And Crawford. line Doug the from

Unknown Analyst

question beating wanted a At intensity horse, I the a to dead risk competitive just on double-click bit. of the

is release actions So Quest promotional you commentary the and press activity, Minn you Kota motor -- out on success. trolling the truck called and pricing

the my just of is explicitly, want a now it environment quarter ask accelerating you answer, year I I important think do that competitive and in terms you're seasonal think you its versus relative know and also closed? to but the question -- intensity is this in to So ago in I the third quarter

Helen Johnson-Leipold

just a usually Well, on across you're when more standpoint. is going business in talking the on I which increases. And lot about. got think the a where market little you're it it happens from and But that activity we've soft, demand a promotional board, depends a

of we've business, I of of a economic we're obviously the and this more attracted the, kind think -- competitive the you've activity. also time changing competitive got mix -- we've think, there's of depending during and some uncertainty, as I on and say, products in space, price little traction frame more seeing, but little price. bit And has pricing think the players outdoor because more where gaining become to lower forward we be is would But premium competition than some far in the the of the outdoor as promotions I the reality space good are I are going a have game. going and general, to that a popularity

Unknown Analyst

fishing allocation. And know is specifically, think on I capital meant that. but just my then you question I last Great.

So accretive what the million think but that in and generate the you cash on cash is the I return offset this share use sheet handful you R&D way, you wonder about most on $XX and of have that threat? that think over years. you first if do it Is in competitive free you'll the such this invested capital more aggressively investing it dividends, M&A, can perhaps repo, some dividends, special the of next balance or of innovation

David Johnson

to plan. everything invest Yes. the cost that's look I you business better than it as is mean, a that's much we capital. grow that capital profitably our Obviously, and to and there's at. to our that preference know, And profile of the grow risk return

what look it on and want capital and take business the into we back the is growth to Yes, organic or perhaps just depends going So at. project what invest through either to acquisitions. we're that it

Operator

question-and-answer does remarks. like I'd of This today's conclude any hand for back the Helen the to further Johnson-Leipold session to program. program

Helen Johnson-Leipold

all you. Thank you a for I great us hope joining today. everybody weekend. Thank has

Operator

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

Good now disconnect. You day. may

Johnson Outdoors (JOUT) 3 May 242024 Q2 Earnings call transcript