The Outdoor Solutions division of Jarden Corporation had a 9 percent drop in sales to $565.7 million for the third quarter ended Sept. 30, but operating income grew by 4.1 percent to $63.4 million. The outdoor unit’s results this year included $17.3 million in depreciation and amortization charges and $4.3 million in integration charges against depreciation and amortization charges of $15.9 million last year, and integration charges of $4.3 million. The unit includes K2, Coleman, Völkl, Atlas, Tubbs, Marmot and Campingaz and others.
The parent company saw sales declines by 7 percent to $1,351.2 million in the quarter, with a 15.5 climb in net earnings to $73.7 million. While part of the drop in sales was attributed to currency fluctuations and a drop in Jarden’s Process Solutions unit, the rest was because of continued retail weakness overall. The gross margin grew by 0.8 percentage points to 29.4 percent.
Jarden said that the cold weather had helped its winter sports business get off to a good start, noting a 5-7 percent gain for Marmot sell-throughs in September and October. The company noted that the de-stocking trend was passing in winter sports specifically, but indicated that it was still planning for a decline in sales this season. It reiterated that it expected to decline less than its competitors and gain share in the category.
Most of the decline is in high-end equipment, suggesting that it expects much of its revenue to shift to its higher-margin accessories line. The decline will be driven by fewer retail doors in resort towns, it said. Jarden also hinted that it took a position in inventory for the category that might allow it to fill some orders later in the season.
It also added that 2010 for the Outdoor unit would see further improvements in profitability as it continues to get the benefit of an improved manufacturing platform and stable input costs. Coleman, in particular, was singled out as a brand that would benefit from a more efficient supply chain.
In a recent presentation of his company to financial analysts, Jim Lillie, president and chief operating officer of Jarden, indicated a new momentum for Marmot at retail. He also hinted at the possible acquisition of a North American company with assets in Europe. Jarden has not made any new acquisitions since its takeover of K2 two years ago (more in Sporting Goods Intelligence Europe).