Vista Outdoor reported a drop of 11 percent in the total turnover to $581 million for the third quarter of its financial year ended Dec. 31. It was due essentially to deeper discounting of accessories because of market pressures in a continuously challenging retail environment in the U.S., which also caused the group's gross profit margin to decline to 21.7 percent from 25.8 percent in the year-ago period.
Lower sales in the Shooting Sports segment were partially offset by modest growth in Outdoor Products, which generated revenues of $295 million thanks to higher sales of sports protection items such as helmets and goggles. Improved pricing and a better product mix led to a 4 percent increase in the segment's gross profit to $74 million.
The U.S. tax reform helped the group to report net earnings of $53.7 million for the quarter, compared with a net loss of $377.7 million in the year-ago period, which had been mainly caused by an impairment charge. On an adjusted basis, net income fell by 78.8 percent to just $7.7 million.
On the other hand, cash flow from operating activities reached $243 million in the first nine months of Vista's financial year as compared to $58 million in the year-ago period. This has helped the company to repay $108 million worth of debt during the latest quarter.
Vista's new chief executive, Christopher Metz, said he has started various cost-saving initiatives. He added that the sale process for the group's sports eyewear and sports protection business is well underway, and that it has received strong interest from prospective buyers.