ANOKA, Minn. (BRAIN) — In its most recent quarter, Vista Outdoor recorded an 8% sales increase in its Outdoor Products business unit, which encompasses Bell, Giro, Fox Racing, Blackburn, QuietKat, and CamelBak, among other brands. Much of the increase, however, was due to acquisitions — including Fox Racing — made since last year. Subtracting that new business, organic sales were down 20%, which the company attributed to "high channel inventory."
The company said it expects to "spin" its Outdoor Products business unit off into a separate publicly traded company, yet to be named, in the fourth calendar quarter this year. The other part of its business, Sporting Products, contains the company's ammunition brands.
Gross profit in Outdoor Products increased 3% to $95 million, an increase the company said was "driven by acquisitions, partially offset by decreased volume from organic businesses." The numbers are for Vista Outdoor's fiscal Q1 2024, which ended June 30, 2023.
"The first quarter of fiscal year 2024 was a testament to our continued financial discipline and focus on margin improvement and cash flow as we head toward spin," said Andy Keegan, the vice president and interim CFO of Vista Outdoor, said in a press release after markets closed Wednesday.
"Our performance within the Outdoor Products segment was as expected and our previously announced cost reduction and earnings improvement program has begun to take hold. These impacts are translating to a positive impact on our bottom line as seen by the 473 basis-point sequential improvement in our Adjusted EBITDA margins," Keegan said.
In Outdoor Products, first-quarter sales were $317 million, up from $292 million in the quarter last year. The $317 million included about $82 million in revenue from new acquisitions, so organic sales in Outdoor Products was $235 million. The company acquired Fox Racing and Simms Fishing during its second fiscal quarter of 2023 (roughly the third quarter of calendar 2022), so those brands' revenues were not included in its Q1 2023 fiscal report.
Company-wide, sales decreased $109 million to $693 million, down 14 percent. Organic sales were $611 million, a decline of 24 percent, driven by lower shipments across nearly all categories in the Sporting Products segment and declines in the organic Outdoor Products businesses.
Vista Outdoor will hold an investor conference call Thursday morning. Earlier this week the company appointed Eric Nyman as the new CEO of the Outdoor Products business; he will lead the spin-off company when the split is completed.
The company's stock is traded on the NYSE under the VSTO symbol. Stock quotes are available at investors.vistaoutdoor.com.
