Vista Outdoor’s second quarter earnings declined 25 percent, according the company’s most recent filing with the Securities and Exchange Commission — a side effect of post-election market conditions “persisting longer than expected.”
Sales likewise dipped 16 percent, the company’s second double digit loss so far this year.
“During the second quarter, the competitive environment in ammunition, firearms and shooting-related accessories continued to impact our business,” said Vista Outdoor Chief Financial Officer Stephen Nolan in the regulatory filing published Thursday. “Ongoing promotional activity combined with high inventory trends in our wholesale channels contributed to a challenging quarter.”
Vista owns more than three dozen companies in firearms, ammunition and shooting accessories, including Savage Arms, Stevens, Federal Premium, Speer and American Eagle. It also holds brands in the outdoor lifestyle market — three of which new CEO Chris Metz said will be divested to better align the company’s core business with its product offerings.
Metz, former president of Arctic Cat — a Minnesota-based snowmobile and all-terrain vehicle manufacturer —took the helm at Vista last month. He announced Thursday shakes-ups in the company’s firearms sector, starting with the elimination of Shooting Sports Segment President Bob Keller.
“While I’ve only been here a short time, I realize we have much to do: we must make significant changes, act decisively, and move quickly to reposition and stabilize the company,” he said. “We will take an aggressive position on profit improvement through both margin expansion and cost reductions across all areas of the core business.”
Vista revised its financial outlook for the remainder of the year, anticipating sales will not exceed $2.26 billion.
“The market contraction and competitive environment … will have more of an impact in the second half of the year than it did in the first half, including the full impact of the ammunition pricing action, which we took in the first and second quarters,” Nolan said. “While we have taken actions to reduce costs, these initiatives have been more than offset by persisting market conditions.”