As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at leisure products stocks, starting with Polaris (TSX:PIF) (NYSE:PII).
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.
Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.
In light of this news, leisure products stocks have held steady with share prices up 3% on average since the latest earnings results.
Polaris (NYSE:PII)
Founded in 1954, Polaris (NYSE:PII) designs and manufactures high-performance off-road vehicles, snowmobiles, and motorcycles.Polaris reported revenues of $1.96 billion, down 12.3% year on year. This print fell short of analysts’ expectations by 9.8%. Overall, it was a disappointing quarter for the company with a miss of analysts’ earnings estimates.
Unsurprisingly, the stock is down 2.9% since reporting and currently trades at $79.73.
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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.
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.
Malibu Boats (NASDAQ:MBUU)
Founded in California in 1982, Malibu Boats (NASDAQ:MBUU) is a manufacturer of high-performance sports boats and luxury watercrafts.Malibu Boats reported revenues of $158.7 million, down 57.4% year on year. This print beat analysts’ expectations by 1.1%. However, it was a softer quarter as it logged a miss of analysts’ earnings estimates.
The stock is up 13.4% since reporting and currently trades at $39.60.
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 missed analysts’ expectations by 6.9%. Overall, it was a disappointing quarter as it also produced revenue guidance for next quarter missing analysts’ expectations and underwhelming earnings guidance for the next quarter.
The stock is up 10.3% since reporting and currently trades at $81.09.
This content was originally published on Stock Story
