After a strong fiscal year 2018, which saw record sales led by demand for new products, Johnson Outdoors had a difficult act to follow: the company posted lower sales for its first fiscal quarter ended Dec. 28, 2018. The management said it is building momentum behind a new product line-up, particularly in fishing, leading it to anticipate revenue growth for the current financial year.
The group's total revenues declined by 10 percent in the quarter to $104.4 million, leading to a 15 percent decrease in operating profits to $6.0 million, which the company blamed on a shift in the pace of new product releases that led to an unfavorable comparison in fishing equipment sales. In the fishing segment, sales fell by 11.4 percent to $78.8 million, while the operating profit dropped by 18.8 percent to $11.4 million.
In the diving segment, revenues were down by 10.9 percent to $15.5 million, primarily due to weakness in Asian markets and a two percent negative impact from foreign currencies. The company recorded an operating loss of $707,000 in diving, compared with a loss of $385,000 for the year-ago quarter.
In the camping segment – which includes Jetboil's outdoor cooking systems and Eureka! camping and hiking equipment – sales remained flat at $5.8 million, with positive momentum from Jetboil. The operating loss in this segment narrowed from $724,000 for the first quarter of fiscal 2017 to $686,000 for the latest period.
Sales were also flat in recreational watercraft products at $4.3 million, and the operating loss increased from $1.1 million to $1.5 million year-on-year.
The company's overall gross margin inched down by 0.3 percentage point to 44.2 percent. Net income reached $3.5 million, up sharply from $0.2 million for the previous year's quarter due to a dramatic decline in the tax rate to 18.7 percent from 97.2 percent. The higher duties imposed by the U.S. government on Chinese imports may have a negative impact on earnings of between $6 million and $9 million.