Camelbak suffered a drop of 31.4 percent in operating income to $3.5 million in the third quarter ended Sept. 30 as sales fell by 5.5 percent to $34.7 million in the period, but the officials of the parent company, Compass Diversified (Codi), said they were still “excited” about its growth potential.
They noted that demand for Camelbak's hydration products continued to recover slowly after a big slump suffered in many markets during the second quarter because of unfavorable weather conditions.
Hydration systems and bottles represented about 84 percent of the company's sales during the latest quarter. While sales of hydration systems declined by $3.3 million as compared to the year-ago period, bottles were up by $1.3 million and gloves were down by $0.7 million.
The declines in hydration systems and gloves were partly due to lower demand from the U.S. Military. In fact, military sales represented only 30 percent of total sales, down from 37 percent a year ago. Sales outside the U.S. grew to about 18 percent of the total turnover from 14 percent.
The gross margin fell for Camelbak to 43.8 percent from 45.3 percent due to an unfavorable sales mix in hydration systems and accessories, partly offset by a favorable mix in bottles.
Adding other operations, Codi's total consolidated sales grew by 10.1 percent to $265.5 million during the quarter. Its net income went up sharply to $78.3 million from $6.4 million in the year-ago period thanks to extraordinary gains.
As previously reported, Codi lowered its stake in Fox Factory Holdings from 75.8 to 56.8 percent in August. This maker of mountain bike suspensions and other transportation-related parts reported 81.5 percent higher net income of $9.9 million for the third quarter on 12.9 percent higher sales of $82.3 million.