The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how leisure products stocks fared in Q2, starting with Acushnet (NYSE:GOLF).
Leisure products cover a wide range of goods in the consumer discretionary sector. Maintaining a strong brand is key to success, and those who differentiate themselves will enjoy customer loyalty and pricing power while those who don’t may find themselves in precarious positions due to the non-essential nature of their offerings.
The 15 leisure products stocks we track reported a slower Q2. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 21.9% below.
After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.
In light of this news, leisure products stocks have held steady with share prices up 3.8% on average since the latest earnings results.
Acushnet (NYSE:GOLF)
Producer of the acclaimed Titleist Pro V1 golf ball, Acushnet (NYSE:GOLF) is a design and manufacturing company specializing in performance-driven golf products.Acushnet reported revenues of $683.9 million, flat year on year. This print fell short of analysts’ expectations by 3.7%. Overall, it was a slower quarter for the company with full-year revenue guidance missing analysts’ expectations.
Unsurprisingly, the stock is down 5.5% since reporting and currently trades at $63.47.
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Best Q2: American Outdoor Brands (NASDAQ:AOUT)
Spun off from Smith and Wesson in 2020, American Outdoor Brands (NASDAQ:AOUT) is an outdoor and recreational products company that offers firearms and firearm accessories.American Outdoor Brands reported revenues of $41.64 million, down 4.1% year on year, outperforming analysts’ expectations by 1.4%. The business had a very strong quarter with an impressive beat of analysts’ earnings estimates.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $9.10.
Weakest Q2: Smith & Wesson (NASDAQ:SWBI)
With a history dating back to 1852, Smith & Wesson (NASDAQ:SWBI) is a firearms manufacturer known for its handguns and rifles.Smith & Wesson reported revenues of $88.33 million, down 22.7% year on year, falling short of analysts’ expectations by 13.8%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.
Smith & Wesson delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 10.8% since the results and currently trades at $12.66.
Solo Brands (NYSE:DTC)
Started through a Kickstarter campaign, Solo Brands (NYSE:DTC) is a provider of outdoor and recreational products.Solo Brands reported revenues of $131.6 million, flat year on year. This result beat analysts’ expectations by 2.4%. Taking a step back, it was a softer quarter as it recorded full-year revenue guidance missing analysts’ expectations.
The stock is down 32.5% since reporting and currently trades at $1.35.
Ruger (NYSE:RGR)
Founded in 1949, Ruger (NYSE:RGR) is an American manufacturer of firearms for the commercial sporting market.Ruger reported revenues of $130.8 million, down 8.4% year on year. This result missed analysts’ expectations by 5%. Overall, it was a disappointing quarter for the company. Besides the revenue miss, profitability ratios also took a hit as gross margin declined.
The stock is down 9.3% since reporting and currently trades at $40.94.
This content was originally published on Stock Story
