JOHNSON OUTDOORS INC Q2 FY2025 earnings call

• Continued market challenges but pockets of good news with new products in Fishing and Camping. - Investment in innovation critical, with Humminbird and Jetboil new products exceeding expectations. - Old Town launched new watercraft additions. - Diving business facing challenges, but acquisition for SCUBAPRO aims to drive efficiencies. - Tariffs impacting business, with strategies like adjusting supply chain and pricing in place. - Debt-free balance sheet and cash position to remain resilient.

In the Fishing segment, the Humminbird brand launched new technology like MEGA Live 2 and Xplore in the first quarter, started shipping in the second quarter with demand exceeding expectations. In the Camping and Watercraft segment, Jetboil launched new Fast Boil Systems with orders outpacing expectations, and Old Town launched five new watercraft additions, being a strong leader in a depressed market. The Diving segment continues to face challenging marketplace impacted by global economic uncertainties and consumer travel. Financial details: Gross margin was 35% in the second quarter, up slightly from the prior year. Inventory levels improved with balance at $180 million in March, down from the prior year's second quarter.

• Cost savings program targeting 1-2 points of gross margin benefit in the quarter, looking to expand it. - Uncertainty in full-year tax outlook due to macro environment, but managing carefully. - Focus on innovation, operational efficiency, and e-commerce for future growth.

• Tariffs impacting business despite U.S.-based operations. - Global economic uncertainties affecting the diving business. - Cautious retail and trade environment impacting overall performance.

Q: How does the pipeline look for new products in upcoming quarters?

A: We've launched new products for this season in fishing, camping, and watercraft that are beating expectations, and we're working on longer-term innovation for next year.

Q: Talk about trends during the quarter, year-over-year changes, and impact of tariffs?

A: It's been a tough environment with consistent consumer sentiment and retailer hesitation; tariffs are impacting, but we're using strategies to mitigate.

Q: Details on gross margin, cost savings, and discounting?

A: Gross margin affected by discounting but offset by cost savings program targeting 1-2 points of benefit, with plans to expand savings.

Q: Comment on unusually high tax rate in the quarter?

A: Due to income/expense in different jurisdictions and a one-off tax audit accrual in Europe; full-year outlook uncertain but managed carefully.