Earnings recap: More outdoor companies pad their top and bottom lines
The rest of the Q1 2021 earnings reports are in. Publicly traded, outdoor-focused corporations continued to score huge gains.
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Up and to the right. That’s the simple yet accurate way to describe outdoor companies’ financial performance to begin 2021. The latest crop of first-quarter earnings reports provides additional evidence that the industry continues to crush revenue and income comps from the same period a year ago.
Below is an earnings recap of publicly traded outdoor corporations with one or more outdoor businesses in their portfolio. Of the businesses listed here, all but two notched double-digit revenue gains (Kathmandu didn’t report and Gregory parent Samsonite International was down due to softness in the travel category). This recap is the second of two parts. Part one includes updates from Adidas, Columbia, Garmin, Thule, and more.
Now that the Q1 report cards have been published and we’re well into the calendar second quarter, what’s in store for these companies? A few trends have emerged in recent months.
One, many are looking to shore up their supply chains, which have been hit hard by growing demand and logistical challenges. Our recent article, Supply chain crunch: How outdoor brands are coping with delays and disruptions, digs into this issue.
Two, as more consumers flock to outdoor activities, companies are looking to reach new audiences and grow participation. Dick’s Sporting Goods, for example, will soon launch an outdoor retail concept called Public Lands.
And three, many companies that are flush with cash appear to have M&A on their minds. In the last few weeks, companies like Clarus Corp. and Vista Outdoor have expanded into new categories with market-shifting acquisitions. Look for more consolidation as companies seek accretive acquisitions that can boost their top lines and bolster category expansion.
OBJ will continue to cover these topics and more in the coming weeks. In the meantime, here is the latest batch of earnings reports from the outdoor industry.
Callaway Golf Co. (NYSE: ELY): +47%
The parent company of outdoor apparel and gear brand Jack Wolfskin reported companywide revenue soared 47 percent to $652 million in Q1 while net income of $272 million was up significantly from $29 million a year ago. Callaway didn’t break out Jack Wolfskin’s numbers, but company CEO Chip Brewer said this of its outdoor apparel and gear asset: “This is the business that probably most overperformed expectations in Q1. As you probably recall, this business has started to deliver some nice year-over-year growth at the end of last year and we’re starting to look like we have turned the corner and brand momentum.” In April, OBJ spoke with Jack Wolfskin’s North American GM Diana Seung for an in-depth look at how the brand is positioning itself in this market.
Canada Goose Holdings Inc. (NYSE: GOOS): +33.7%
Apparel and footwear brand Canada Goose reported revenue for its fiscal 2021 fourth quarter grew 33.7 percent to C$208.8 million (US$172.9 million). The company reported a loss of C$5.2 million (US$4.3 million), down from a profit of C$7.3 million (US$6 million) in Q4 2020.
Canadian Tire Corp. (OTC: CDNAF): +13.1%
The parent of Helly Hansen reported that the outdoor brand’s Q1 revenue was C$136.3 million (US$112.9 million), up 12.2 percent from the same quarter a year ago. Companywide, CTC revenue grew 13.1 percent. Of Helly Hansen’s performance, CTC CFO Greg Craig said the leadership team was “pleased with their internal revenue growth of 12 percent, driven by strength of the ecommerce channel, which more than doubled compared to a year ago.” The big news out of Helly Hansen, aside from continued sales growth, is that CEO Paul Stoneham is retiring.
Clarus Corp. (Nasdaq: CLAR): +40.7%
Clarus Corp.—the parent of Black Diamond Equipment, Pieps, SKINourishment, and now Rhino-Rack—reported revenue for the first quarter of $75.3 million, up 40.7 percent from the same period a year ago. Net income shot up to $5.7 million from $0.04 million a year ago. Sales at Black Diamond grew 13 percent, and the company now expects the brand to post 20 percent sales growth for 2021. Clarus and Black Diamond President John Walbrecht said of the flagship backcountry gear brand: “We’ve benefited from the recovery in the outdoor market and reduced inventory volatility at retail, which allowed us to accelerate our growth, particularly with some of the key retail accounts. This is despite continued headwinds from COVID-19 and supply chain challenges.”
Deckers Outdoor Corp. (NYSE: DECK): +49.7
Hoka One One was a key driver for Deckers’ blowout fiscal fourth quarter; the brand’s sales grew 74.2 percent to $177.5 million in the period. Deckers CEO Dave Powers said the company has even bigger plans for the footwear brand: “Over the long-term, we’re investing in major drivers of our business, including building Hoka to a $1 billion-plus global performance brand that represents a significant portion of total company revenue, driving our direct-to-consumer business towards 50 percent of our global revenues, scaling international markets across brands and seeding opportunities beyond footwear.” Companywide, Deckers’ sales grew 49.7 percent to $561.2 million. Net income doubled to $28 million. As for other outdoor brands in Q4, Teva revenue was up 1 percent, and Sanuk was down 8.8 percent.
Dick’s Sporting Goods Inc. (NYSE: DKS): +118.9%
Dick’s Sporting Goods continued to knock it out of the park. The retailer reported first-quarter sales growth of 118.9 percent to $2.9 billion, while net income of $361.8 million was up from a loss of $143.4 million in the first quarter of 2020. On its latest earnings call, the company provided only a few details on its forthcoming Public Lands outdoor retail concept: “Based on our research, we think there’s an opportunity in the marketplace and believe this new concept will be a great growth vehicle for us,” said Ed Stack, executive chairman and former CEO. While the company hasn’t revealed too much about Public Lands, we’ve got the inside scoop on what’s coming for the retailer’s latest venture. Todd Spaletto spoke with Outside Business Journal in an exclusive video about Public Lands’ launch later this year.
Kathmandu Holdings Ltd. (NZE: KMD): N/A
New Zealand-based Kathmandu—which owns and operates its eponymous brand as well as Oboz Footwear and Rip Curl—reports on a half-year basis only and didn’t post an update following the calendar first quarter (the company’s fiscal third quarter). Look for more on the company in our next quarterly report in a couple of months.
Samsonite International SA (OTC: SMSEY): -41%
The parent company of Gregory Mountain Products and High Sierra continued to struggle as travel trends remain sluggish amid the pandemic. Samsonite reported sales for the first quarter of $354.7 million, down 41 percent from Q1 2020, and it posted a loss of $67.4 million. Gregory was Samsonite’s best-performing asset. The brand’s sales of $15.8 million were down only 1.6 percent from the year-ago period. High Sierra sales fell 28 percent to $4.3 million.
Vail Resorts Inc. (NYSE: MTN): +28.1%
The world’s largest ski resort operator reported sales for its fiscal third quarter ended April 30 of $889.1 million, a 28.1 percent jump from the same quarter a year ago. Net income rose 80 percent to $274.6 million. CEO Rob Katz said the company benefited from a full ski season, unlike the 2019/20 campaign that was cut short last March. What’s more, the season got better into the spring. “Results continued to improve as the season progressed, primarily as a result of stronger destination visitation at our Colorado and Utah resorts, including improved lift ticket purchases relative to fiscal 2021 second-quarter results,” he said.
VF Corp. (NYSE: VFC): +22.8%
VF—whose brands include the “outdoor” portfolio of The North Face, Altra, Icebreaker, Smartwool, and Timberland, and the “active” portfolio of Eagle Creek, Eastpak, JanSport, and Vans—said companywide revenue improved 22.8 percent to $2.6 billion in the fiscal fourth quarter. The company’s profit of $89.5 million was up from a massive loss of $483.8 million in the year-ago quarter. The company’s outdoor segment saw Q4 sales spike 25 percent in the quarter to $1.1 billion from $848.3 million and grew 20 percent on a currency-neutral basis. The North Face sales improved 28 percent globally and 13 percent in the Americas during the quarter.
Wolverine World Wide Inc. (NYSE: WWW): +16.3%
The parent of Merrell, Chaco, and other footwear brands reported first-quarter revenue of $510.7 million, a 16.3 percent increase from a year ago. The company’s net earnings of $38.4 million tripled its profit of $12.8 million in Q1 2020. Wolverine CEO Blake Krueger again referenced the company’s ecommerce capabilities, which hit 83.6 percent growth in the period. He also gave a shout-out to Merrell, which posted 25 percent growth in Q1 saying the brand “is well-positioned with both its outdoor performance and lifestyle businesses and we expect the brand’s growth will continue to accelerate going forward.”
Yeti Holdings Inc. (NYSE: YETI): +41.9%
The cooler, drinkware, and outdoor accessory brand reported sales for the first quarter of $247.6 million, a 41.9 percent increase from the same quarter a year ago. Net income of $30.5 million was more than three times greater than its profit of $8.5 million last year.