Why Johnson Outside Inventory Was Leaping In the present day


What happened

shares of Johnson outdoors (JU 18.38%) rose today after the outdoor leisure company released a better-than-expected fourth-quarter earnings report.

As of 1:24 p.m. ET, the stock was up 18.9%.

so what

Johnson, best known for manufacturing fishing gear, boats and personal watercraft under brands like Old Town, Minn Kota and Humminbird, said revenue for the quarter rose 18% to $196.4 million. The stock is only followed by one analyst, who called it $168.6 million in revenue.

Fishing revenue, by far the company’s largest category, rose 38% to $152.3 million.

Gross margin fell sharply, down 6 percentage points, as the company faced higher material costs and inventory costs, and operating income declined slightly to $13.3 million from $13.6 million. Bottom line, the company benefited from lower tax expenses and earnings per share increased to $0.95 from $0.68.

CEO Helen Johnson-Leipold said: “The fiscal fourth quarter showed some easing in supply availability and we remain focused on evaluating options to address increased costs and efficiency in our supply chain. We ended the fiscal year with strong orders and we continue to replenish customer inventories.”

What now

Johnson Outdoors didn’t provide specific guidance for fiscal 2023 or the current quarter, but the company said it is focused on tracking demand and managing above-average inventories. Continued headwinds in the supply chain are also expected and inflation will continue to weigh on profits.

The comment implied earnings could fall this fiscal year, and as a company focused on discretionary spending, that’s typical of a recession.

Still, Johnson has proven the long-term value of its brands and should bounce back when the economy recovers.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.