Double-Digit Revenue Growth
Company reported double-digit growth in the quarter (management noted this is meaningful given the quarter is typically seasonally slower). Management said most of the increase was unit-volume driven, with incremental pricing also implemented to offset cost pressure.
Large Improvement in Pre-Tax Loss
Loss before income taxes improved to a loss of $1.3 million vs. a pre-tax loss of $18.9 million in the prior year quarter — an improvement of approximately $17.6 million.
Gross Margin Expansion
Gross margin for the quarter rose to 36.6%, up 6.7 percentage points year-over-year. Drivers included overhead absorption from higher volumes, price increases, and progress on cost-savings initiatives which helped offset higher material costs.
Inventory Reduction and Strong Balance Sheet
Ending inventory was $103.9 million, down about $17.7 million from the prior year quarter. The company remains debt-free and continued to pay a meaningful dividend (Board-approved in December).
Product and Segment Strength
Fishing: Minn Kota trolling motors and Humminbird (strong demand for Explorer series and Mega Live 2) performed well. Camping & watercraft: Jetboil and Old Town showed growth with Jetboil demand exceeding expectations. Diving: Scubapro’s Hydros Pro 2 began shipping in December and showed positive momentum.
Digital and E-commerce Momentum
Investments in digital and e-commerce are yielding results: management called e-commerce the fastest-growing channel, helping discovery and purchase and contributing to quarterly growth.
Cost Savings and Warranty Improvement
Ongoing cost-savings initiatives were cited as a contributor to margin improvement. Warranty expense decreased (management indicated this accounted for less than one percentage point of the operating expense improvement in the quarter).