Q2 Rundown: Vista Outdoor (NYSE:VSTO) Vs Other Leisure Products Stocks

As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the leisure products industry, including Vista Outdoor (NYSE:VSTO) and its peers.

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.

After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.

Thankfully, leisure products stocks have been resilient with share prices up 6.3% on average since the latest earnings results.

Vista Outdoor (NYSE:VSTO)

Emerging from a 2015 spin-off, Vista Outdoor (NYSE:VSTO) specializes in the production and sale of outdoor gear and shooting sports equipment.

Vista Outdoor reported revenues of $644.2 million, down 7.1% year on year. This print was in line with analysts’ expectations, and overall, it was a very strong quarter for the company with full-year revenue guidance exceeding analysts’ expectations and a narrow beat of analysts’ earnings estimates.

“Revelyst made progress implementing our actionable standalone strategy to drive value creation in the first quarter amid continued market headwinds in certain segments. This gives us confidence in our full-year financial targets as we seek to show sequential quarter-over-quarter improvement throughout the year,” said Eric Nyman, Co-CEO of Vista Outdoor and CEO of Revelyst.

Interestingly, the stock is up 15.1% since reporting and currently trades at $44.18.

Is now the time to buy Vista Outdoor? Access our full analysis of the earnings results here, it’s free.

Best Q2: Latham (NASDAQ:SWIM)

Started as a family business, Latham (NASDAQ:SWIM) is a global designer and manufacturer of in-ground residential swimming pools and related products.

Latham reported revenues of $160.1 million, down 9.6% year on year, outperforming analysts’ expectations by 2.2%. The business had a stunning quarter with an impressive beat of analysts’ earnings estimates and an impressive beat of analysts’ operating margin estimates.

The market seems happy with the results as the stock is up 125% since reporting. It currently trades at $6.97.

Is now the time to buy Latham? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: 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 5% since the results and currently trades at $13.49.

Read our full analysis of Smith & Wesson’s results here.

Clarus (NASDAQ:CLAR)

Initially a financial services business, Clarus (NASDAQ:CLAR) designs, manufactures, and distributes outdoor equipment and lifestyle products.

Clarus reported revenues of $56.48 million, down 2.5% year on year. This print missed analysts’ expectations by 4.8%. It was a slower quarter as it also produced a miss of analysts’ earnings estimates.

The stock is down 22.7% since reporting and currently trades at $4.45.

Read our full, actionable report on Clarus here, it’s free.

Solo Brands (NYSE:DTC)

Started through a Kickstarter campaign, Solo Brands (NYSE:DTC) is a provider of outdoor and recreational products.

Solo Brands reported revenues of $131.6 million, flat year on year. This result surpassed analysts’ expectations by 2.4%. Zooming out, it was a mixed quarter with a miss of analysts’ earnings estimates.

Solo Brands delivered the highest full-year guidance raise among its peers. The stock is down 33% since reporting and currently trades at $1.34.

Read our full, actionable report on Solo Brands here, it’s free.

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