Stock Story -
Outdoor recreational products company Johnson Outdoors (NASDAQ:JOUT) missed analysts' expectations in Q2 CY2024, with revenue down 7.8% year on year to $172.5 million. It made a GAAP profit of $0.16 per share, down from its profit of $1.44 per share in the same quarter last year.
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Johnson Outdoors (JOUT) Q2 CY2024 Highlights:
- Revenue: $172.5 million vs analyst estimates of $176.1 million (2.1% miss)
- EPS: $0.16 vs analyst expectations of $0.22 (27.3% miss)
- Gross Margin (GAAP): 35.8%, down from 41.5% in the same quarter last year
- Market Capitalization: $413.2 million
Operating in locations worldwide, Johnson Outdoors (NASDAQ:JOUT) specializes in innovative outdoor recreational products for adventurers worldwide.
Leisure ProductsLeisure 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.
Sales GrowthA company's long-term performance is an indicator of its overall business quality. While any business can experience short-term success, top-performing ones enjoy sustained growth for multiple years. Over the last five years, Johnson Outdoors grew its sales at a weak 1.2% compounded annual growth rate. This shows it failed to expand in any major way and is a rough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or emerging trend. Johnson Outdoors's history shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 9.6% annually.
This quarter, Johnson Outdoors missed Wall Street's estimates and reported a rather uninspiring 7.8% year-on-year revenue decline, generating $172.5 million of revenue. Looking ahead, Wall Street expects sales to grow 13% over the next 12 months, an acceleration from this quarter.
Operating MarginOperating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses–everything from the cost of goods sold to advertising and wages. It's also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.
Johnson Outdoors's operating margin has shrunk over the last year and averaged 1.8%. The company's profitability was mediocre for a consumer discretionary business and shows it couldn't pass its higher operating expenses onto its customers.
In Q2, Johnson Outdoors's breakeven margin was down 9.6 percentage points year on year. This contraction shows it was recently less efficient because its expenses increased relative to its revenue.
Key Takeaways from Johnson Outdoors's Q2 Results We struggled to find many strong positives in these results. Its EPS missed and its revenue fell short of Wall Street's estimates. Overall, this quarter could have been better. The stock remained flat at $40.54 immediately after reporting.
