Johnson Outdoors Inc (JOUT) 2026 Q1 法說會逐字稿

Hello, everyone, and welcome to the Johnson Outdoors first quarter 2026 earnings conference call. Today's call will be led by Helen Johnson-Leipold, Johnson Outdoors Chairman and Chief Executive Officer. Also on the call is David Johnson, Vice President and Chief Financial Officer.

(Operator Instructions) The call is being recorded your participant implies consent to our recording this call. If you do not agree to these terms, simply drop off the line.

I would now like to turn the call over to Pat Penman from Johnson Outdoors. Please go ahead, Ms. Penman.

Good morning, and thank you for joining us for our discussion of Johnson Outdoors results for the 2026 fiscal first quarter. If you need a copy of today's news release, it is available on our website at johnsonoutdoors.com under Investor Relations.

I also need to remind you that this conference call may contain forward-looking statements. These statements are made on the basis of our current views and assumptions and are not guarantees of future performance.

Actual events may differ materially from those statements due to a number of factors, many beyond Johnson Outdoors' control. These risks and uncertainties include those listed in our press release and filings with the Securities and Exchange Commission. If you have additional questions following the call, please contact Dave Johnson or myself.

It is now my pleasure to turn the call over to Helen Johnson-Leipold.

Good morning, everyone. I'll be given by sharing perspective on our start to fiscal 2026 as well as an update on the strategic priorities for our businesses. Dave will review the financial highlights, and then we'll be happy to take your questions.

In the first quarter of fiscal 2026, we saw markets stabilize and solid reception to our new products. That combination helped drive double-digit growth in the quarter, which is encouraging given that this quarter is typically a slower period as we ramp up for the primary selling season. Additionally, the ongoing hard work we've been doing to improve our profitability has been showing results.

Our operating loss for this first quarter was much improved versus the prior year quarter. While there are still uncertainties in the broader environment, we're encouraged by how the fiscal year has started and feel good about the execution of our plans to accelerate the growth of our business in brands.

Starting with Fishing, both our Minn Kota and Hummingbird brands delivered solid performance in the quarter, with the category benefiting from improved trade dynamics. Demand remains strong for Hummingbird's explorer series and MEGA Live 2 fish binders, which launched last fiscal year, and we saw healthy demand across encodes full lineup of trolling motors.

Turning next to Camping and Watercraft. This is an area where our investments in digital and e-commerce are really paying off across Jetboil and Old Town, we've been focused on meeting consumers where they are, which is online and making it easier for them to discover and purchase our products.

These efforts helped drive growth in the quarter. Both Oldtown and Jetboil remain strong leaders in their respective markets. Jetboil continues to see strong demand for its fast oil cooking systems, which has exceeded our expectations.

Finally, in diving, improved conditions across the global markets and our innovation helped drive an increase in sales for the quarter, we continue to see positive momentum for SCUBAPRO's new HydrosPro product that we began shipping in December, HydrosPro 2 builds on the award winning legacy of our original Hydros Pro incorporating meaningful innovation of comfort, fit and performance needed in the buoyancy control device.

Digital engagement is becoming increasingly important in diving as well from educating drivers on new technologies to supporting dealers with better digital tools and active. We see this as another opportunity to strengthen the connection between our products, our retail partners and consumers.

Overall, we are pleased with the start of fiscal 2026, while it's too still too early to predict how the rest of the fiscal year will unfold. Our priorities remain clear across all our businesses, maintaining a strong and robust innovation pipeline building a growing momentum in digital and e-commerce and continuing to improve product cost and operating efficiency with our cost savings initiatives.

These are the right drivers to position Johnson Outdoors for sustainable growth and long-term success. Now I'll turn the call over to Dave for more details on financials.

Thank you, Helen, and good morning, everyone. Loss before income taxes for the first quarter was $1.3 million compared to a pretax loss of $18.9 million in the previous year quarter. The improvement is driven mostly by revenue growth and improving margins. Gross margin for the first quarter improved to 36.6%, up 6.7 points from the prior year. Overhead absorption from higher volumes was the main driver of the improvement in gross margin.

Additionally, price increases and our ongoing progress on cost savings initiatives helped to offset increases in material costs. Operating expenses increased $2.1 million from the prior year first quarter due primarily to increased sales volume-related expense, partially offset by decreased warranty expense.

Tax expense for the quarter was about $2 million, driven mainly by an adjustment related to our U.S. valuation allowance on deferred tax assets. We continue to make good progress on our inventory levels. Our inventory balance at the end of the first quarter was $183.9 million, down about $17.7 million from the previous year quarter.

I want to highlight that our balance sheet remains debt-free, and we continue to pay a meaningful dividend to shareholders, with the Board approving our most recent dividend announced in December. We remain confident in our ability and plans to create long-term value for shareholders.

Now I'll turn the call over to the operator for the Q&A session.

(Operator Instructions)

Anthony Lebiedzinski, Sidoti.

Certainly a great start to the fiscal year, so first, just a general kind of question in terms of pricing versus unit volumes. I don't need specific numbers, but just kind of maybe if you could just talk about what you saw as far as pricing versus unit volumes, that would be a good start.

Well, yes, most of the increase in the quarter was unit volume driven, but we did take pricing across the businesses to react to the cost increases we had. But I would say most of the increase we're seeing is unit volume related.

That's encouraging here thanks Dave, so you guys have for years focused strongly on innovation. Can you share broadly as far as your sales are concerned, what's coming from new products versus a few years ago? Has there been a meaningful change in terms of the new product component of your sales?

I mean innovation has always been critical for us and we have been focusing on improving our success rate. So competition is strong and our main way of maintaining leadership is innovation.

So I would say we continue to make it stronger. And I don't know about the -- Dave, you can comment on the percept volume, but it truly is the driver of growth.

Absolutely. And we've seen improvement in our new product success over the last couple of years. I think during the COVID cycle, that may have come down a little bit, but we're seeing improvement in that area.

Got you. And then you also talked about the growth in the e-commerce channel. Can you share with us what percentage of your revenue is now related to e-commerce? And do you guys have a goal in mind as far as what you want to get to in the next few years?

What we can say is that it's the fastest growing channel we have, and it's definitely expansive growth for us. our goal is to continue to grow that at a faster pace than our -- across our businesses. It's a key contributor to growth year-on-year.

Got you. All right. And then -- so you had a great start here to the fiscal year, strong sell-in to retailers in the December quarter. What is your sense now about the current trade inventory levels?

Well, we were glad that the -- what we said, stabilized is more that the trade was in a good position from an into standpoint to react to good sell-in. We had a good cylinder in the first quarter, and so they are in a good position.

Hopefully, we get the consumer takeaway as the season begins. So I think that the trade is in a healthy position right now.

Okay. That's good to hear. You've done a lot with your cost savings efforts, and it's clearly evident in the gross margin improvement.

I know there was some fixed cost absorption component to that as well. But as it relates to the cost savings initiatives, should we expect to come on that program as we look forward to the rest of the fiscal year?

Yes. It's a key strategy for us going forward, especially in these volatile times with the supply chain. So it will be critical for us to continue to work on optimizing product costs, being as efficient as possible. We've got a whole slew of initiatives that we're working on to make that happen.

Okay. And then in terms of the warranty expense, how significant was that as far as the adjustment to the OpEx.

Yes. I mean it was probably less than 1 point of the operating expense percentage going down. So -- but it did come down in the quarter. So we wanted to point that out.

Got you. Okay. That makes sense. Okay. And lastly for me. I mean, so Dave, you did touch on the tax expense, which we were not expecting for the quarter. going forward, what's the -- where should we expect the tax rate to fall for the balance of the fiscal year?

Yes. I mean, the challenge for us is just the profits in the geographies in which we serve. So we've got the valuation allowance in the U.S. And as we make money in the U.S., that won't -- we won't have tax -- or expense on that because it's all reserved for. So the tax rate will be kind of wacky going forward until we can kind of stabilize our profits.

Okay. Got you. All right. Well, thank you very much, and best of luck.

I'm showing no further questions at this time. I'll now turn it back to Helen Johnson-Leipold for closing remarks.

I just want to thank everybody for joining us is have a great day.

Thank you for your participation in today's conference. This concludes the program. You may now disconnect.