What happened
Shares of Johnson Outdoors (NASDAQ: JOUT) were surging today after the outdoor recreation company posted a better-than-expected fourth-quarter earnings report.
As of 1:24 p.m. ET, the stock was up 18.9%.
So what
Johnson, which is best known for making fishing equipment, boats, and watercraft under brand names like Old Town, Minn Kota, and Humminbird, said that revenue in the quarter rose 18% to $196.4 million. The stock is only followed by one analyst, who had called for revenue of $168.6 million.
Sales in fishing, which is by far the company's biggest category, surged 38% to $152.3 million.
Gross margin fell sharply, down 6 percentage points, as the company faced higher material costs and inventory expenses, and operating profit declined slightly from $13.6 million to $13.3 million. On the bottom line, the company benefited from a lower tax expense, and earnings per share increased from $0.68 to $0.95.
CEO Helen Johnson-Leipold said: "The fiscal fourth quarter showed some easing of supply availability, and we continue to focus on evaluating options to address increased costs and the efficiency of our supply chain. We ended the fiscal year with strong orders, and we continue to replenish customer inventory levels."
Now what
Johnson Outdoors didn't give specific guidance for fiscal 2023 or the current quarter, but the company did say it was focused on tracking demand and managing higher-than-normal inventory levels. It also expects lingering supply chain headwinds, and inflation to continue to take a bite out of profits.
The commentary implies that profits could fall this fiscal year, and as a business focused on discretionary spending, that's typical in a recession.
Still, Johnson has proven the long-term value of its brands and should recover when the economy is back on the mend.
10 stocks we like better than Johnson Outdoors
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Johnson Outdoors wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of December 1, 2022
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.
