JOUT

• Leadership Transition: New CFO Asad Rahman joined the company on June 30, 2026, following the planned upcoming retirement of long-time CFO Dave Johnson, who was recognized for his years of contributions to the firm.
• Overall Financial Results: Q3 2026 operating income was $18.3 million, $11 million higher than the prior year quarter, with approximately $15 million in tariff refunds contributing to the improvement. Year-to-date operating income and gross margin are both up compared to the prior period.
• Strategic Priorities: Management remains focused on three core long-term priorities: 1) innovation leadership across all product segments, 2) building digital and e-commerce excellence to improve brand connectivity and consumer engagement, 3) delivering ongoing operational efficiencies to support margins.
• Financial Structure & Capital Return: The company holds a debt-free balance sheet and continues to pay a meaningful regular dividend to shareholders, with the most recent dividend approved by the board in May 2026.
• Operational Updates: Inventory was increased by $24.5 million YoY to $188.3 million at quarter-end to support projected sales demand. The ongoing strategic cost-savings program continues to deliver measurable bottom-line benefits.

• No formal full-year or next-quarter financial guidance was provided by management. Management declined to give specific forward-looking performance updates for early Q4 2026 (July) trends.
• Management does not expect to receive additional meaningful tariff refunds in future periods.
• Management projects full-year 2026 tax expense to fall in the range of $5 to $6 billion, noting quarterly tax rates will continue to fluctuate due to existing valuation allowances on U.S. income.
• Management expects ongoing raw material costs to remain a headwind for gross margins, but notes existing pricing actions and strategic cost-saving initiatives are in place to partially offset these cost pressures.

Johnson Outdoors reported total company sales up 5% year-over-year (YoY) for Q3 2026, with year-to-date net sales up 15% compared to the prior year nine-month period. No individual segment absolute revenue or contribution percentage figures were provided in the transcript:

1. Fishing (Minn Kota): Continued healthy demand across the full line of trolling motors drove strong quarterly results, with the segment maintaining market leadership.
2. Diving (ScubaPro): Strong sales of regulators and buoyancy compensators delivered a solid YoY sales increase for the segment.
3. Camping and Watercraft (Jetboil, Old Town): The segment faced a challenging quarter due to unfavorable weak market conditions. Old Town's innovative watercraft product line continues to resonate with consumers, while Jetboil retains market leadership in camp cooking.

• Overall market conditions are complex and uncertain, with weak market conditions already negatively impacting the camping and watercraft segment, and broader market weakness could impact future performance.
• Higher raw material costs and dynamic electronic component costs are ongoing headwinds that pressure gross margins, even after offsetting actions.
• The global tariff landscape remains evolving and uncertain, with potential for new cost impacts that the company is monitoring closely.
• Forward-looking statements are not guarantees of future performance, and actual results may differ materially from current expectations due to risk factors beyond the company's control, as detailed in SEC filings.

Q: The analyst asks how business trended from April to June 2026, and for any early observations on July (Q4) performance. / A: Management noted results varied across segments, and that existing innovation plans are on track. Management declined to provide specific forward-looking performance statements, but highlighted that existing momentum is positive and the firm remains focused on core strategic priorities.

Q: The analyst asks for breakdown of what drove higher-than-expected operating expenses (up 11.5% YoY), and how to expect operating expenses to trend moving forward. / A: Roughly half of the YoY increase in operating expenses came from higher variable compensation costs, and the remaining half came from sales volume-related costs and other incremental expenses. Management stated it will continue to prudently manage expenses while maintaining targeted investments in long-term strategic priorities to support future growth.

Q: The analyst asks what core factors will impact gross margin going forward, after noting that gross margin was roughly flat YoY when excluding the one-time tariff refund. / A: Management confirmed ongoing pricing actions and the firm's cost-savings programs remain positive supporting factors for margins. The primary headwind is rising raw material costs, plus dynamic pricing for electronic components that the firm is actively monitoring. Management noted existing cost-saving efforts are positioned to offset a large portion of these incremental costs.