Johnson Outdoors' earnings for its third fiscal quarter, ended on June 28, were hampered by the first round of new tariffs that were imposed by the U.S. on China last September amid the ongoing trade war between the two countries. The company's net income declined by 7.1 percent from the year-ago period to $22.1 million.
The group's total revenues moved up by 3 percent to $176.3 million, driven by the fishing and camping segments. However, the gross margin fell by 1.2 percentage points to 45.2 percent, hit in particular by $1.9 million in new tariffs on Chinese components.
The Diving segment, which the group is trying to strengthen, contracted by 3 percent in dollars, down to $20.2 million, but sales were flat on a currency-neutral basis. The segment's operating profit declined by 4 percent to $1.4 million
Revenues from the Fishing segment gained 5 percent to $128.2 million, led by strong sales of Minn Kota and Humminbird products. However, the operating profit dropped by 10 percent to $29.7 million.
The Camping division, which includes brands such as Jetboil and Eureka, saw sales improve by 6 percent to $14.7 million, led by Jetboil. Here, the operating income grew by 7 percent to $2.3 million.
Hurt by weakness in paddleboarding, sales in the Watercraft recreation segment dropped by 8 percent to $13.0 million, while operating income tumbled by 43 percent to 0.4 million.
Looking ahead, the management said it is focusing on improving operational efficiency to protect margins and better manage working capital. It added that its growing cash and debt-free position enables it to invest in strategic priorities and other opportunities to strengthen its brands. The company reported cash and short-term investments of $149.0 million at the end of the quarter.