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 Clarus (NASDAQ:CLAR).
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.
Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting 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 4.5% on average since the latest earnings results.
Clarus (NASDAQ:CLAR)
Initially a financial services business, Clarus (NASDAQ:CLAR) designs, manufactures, and distributes outdoor equipment and lifestyle products.Clarus reported revenues of $56.48 million, down 2.5% year on year. This print fell short of analysts’ expectations by 4.8%. Overall, it was a disappointing quarter for the company with a miss of analysts’ earnings estimates.
“Against a backdrop of constrained consumers in the outdoor space, we made incremental progress in the second quarter executing Clarus’ strategic initiatives to seek to create long-term value,” said Warren Kanders, Clarus’ Executive Chairman.
Unsurprisingly, the stock is down 22% since reporting and currently trades at $4.49.
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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.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.6% since reporting. It currently trades at $9.03.
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 9.6% since the results and currently trades at $12.84.
Harley-Davidson (NYSE:HOG)
Founded in 1903, Harley-Davidson (NYSE:HOG) is an American motorcycle manufacturer known for its heavyweight motorcycles designed for cruising on highways.Harley-Davidson reported revenues of $1.62 billion, up 12% year on year. This number topped analysts’ expectations by 27.2%. It was a very strong quarter as it also recorded a solid beat of analysts’ earnings estimates and a decent beat of analysts’ motorcycles sold estimates.
Harley-Davidson delivered the biggest analyst estimates beat among its peers. The stock is flat since reporting and currently trades at $33.96.
Brunswick (NYSE:BC)
Formerly known as Brunswick-Balke-Collender Company, Brunswick (NYSE: BC) is a designer and manufacturer of recreational marine products, including boats, engines, and marine parts.Brunswick reported revenues of $1.44 billion, down 15.2% year on year. This print lagged analysts' expectations by 6.9%. It was a disappointing quarter as it also recorded revenue guidance for next quarter missing analysts’ expectations and underwhelming earnings guidance for the next quarter.
The stock is up 10% since reporting and currently trades at $80.86.
This content was originally published on Stock Story
