Johnson Outdoors Inc. Q3 FY2025 earnings call

• Sales in the third quarter increased 5% to $180.7 million, with operating profit up to $7.3 million from an operating loss in the prior year. - Fishing business: Hummingbird's new tech and XPLORE series performing well, with XPLORE winning ICAST award and Minn Kota's product winning an innovation award. - Camping and Watercraft: Jetboil's Fast Boil systems exceeding expectations, Old Town resilient despite weak watercraft market. - Diving: Slightly improved but challenged by global economy and travel uncertainties, with integration of a long-term supplier ongoing. - Focus on operational efficiencies and innovation for future growth.

In the Fishing business, sales contributed to the overall growth. Demand for Hummingbird's MEGA Live 2 Sonar and XPLORE fish finder exceeded expectations, with XPLORE capturing Best in Electronics at ICAST and Minn Kota's Riptide Instinct winning a Marine Power Innovation Award. The Camping and Watercraft business saw Jetboil's Fast Boil cooking systems outpace expectations and Old Town remain resilient despite a weak watercraft market. The Diving business was slightly improved but challenged by global economic uncertainties and consumer travel issues, with integration of a long-term supplier ongoing. Sales in the third fiscal quarter ending June 2025 were $180.7 million, a 5% increase from the prior year's $172.5 million, and operating profit was $7.3 million compared to an operating loss in the previous year.

• Dave expects more tariff impact in the fourth quarter as tariffs flow through inventories. - Forecasting tariffs to be expensed as they move through inventories. - Considering pricing actions across the portfolio to mitigate tariff impacts. - Cost savings program is robust, with focus on product cost improvements. - Working on further inventory reduction despite macroeconomic and tariff challenges.

• Global macroeconomic challenges causing marketplace uncertainties. - Fluctuating marketplace conditions. - Tariff impacts with ongoing uncertainty in how they will play out. - Uncertainties in the diving marketplace due to global economy and consumer travel.

Q: Can you comment on the cadence of sales throughout the quarter from April through June and early read on July?

A: Helen said every month in the quarter saw sales improvement, it's early to talk about July but there was a positive trend with hopes for stability next season.

Q: How should we think about the impact of tariffs going forward?

A: Dave expects more cost in the fourth quarter as tariffs flow through inventories, and they are ready to mitigate tariffs for next season with supply chain progress and looking at alternatives.

Q: Can you comment on pricing actions to mitigate tariffs?

A: David said they have taken pricing on certain product lines and will continue to look at pricing across the portfolio considering consumer dynamics and competition.

Q: Update on cost savings program?

A: David said the cost savings program is robust, with focus on factory efficiencies last year and product cost improvements ongoing for fiscal '26.

Q: Can you sustain reduced promotional activity?

A: Helen said they are in competitive markets and promotions will be considered based on market conditions, with the fourth quarter typically not a high sales quarter seasonally.

Q: Has the ICAST award led to an uptick in demand?

A: Helen said the XPLORE award added momentum and was well-received by the target audience.

Q: Can you further reduce inventory in the next couple of quarters?

A: David said they are working on further inventory reduction, made good progress, but macroeconomic environment and tariffs could impact, but they feel good about where they are and have processes in place to manage it