Vista Outdoor: 'We must act quickly to stabilize the company'
Vista Outdoor announced big changes for the company Thursday amid dismal second quarter financial results. (Photo: Daniel Terrill/Guns.com)
Vista Outdoor’s new top executive wasted no time this week announcing major shake-ups in staff, inventory and product offerings as the company reports its second double digit earnings slide so far this year.
Chief Executive Officer Chris Metz, former president of Arctic Cat — a Minnesota-based snowmobile and all-terrain vehicle manufacturer — took the helm at Vista Oct. 10. He said Thursday the company needed to make changes to weather persisting post-election market conditions, starting with the elimination of Shooting Sports Segment President Bob Keller, “to allow our business leaders to drive changes faster and have clear line of sight to the goals at hand.”
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.
Vista’s President of Firearms Al Kasper and President of Ammunition Jason Vanderbrink will lead the company’s shooting sports segment in Keller’s absence, Metz said.
“I am excited to combine my passion for these brands and this industry with my professional experience and deep background in consumer products,” Metz said in Vista’s regulatory filing published Thursday. “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. We will take an aggressive position on profit improvement through both margin expansion and cost reductions across all areas of the core business.”
The reduction includes divesting three brands in the company’s sports protection business: Bollé, Serengeti and Cébé.
“These brands were acquired as part of the Bushnell transaction in 2013 and focus primarily on fashion, prescription and safety eyewear, which are areas that we have determined are not core to our business,” Metz said. “The sale of these brands is expected to take place over the next few quarters.”
Chief Financial Officer Stephen Nolan said Thursday the company slashed costs through inventory and workforce reduction “to better align production with demand.”
“Ongoing promotional activity combined with high inventory trends in our wholesale channels contributed to a challenging quarter,” he said. “I’m pleased with the significant reductions to company inventory levels we have made, both year over year and sequentially.”
The changes come after Vista reported a 25 percent decline in second quarter earnings and the second double digit dip in sales so far this year. Ongoing weak consumer demand under the new gun-friendly presidential administration will only exacerbate Vista’s financial situation in the second half of the year, Nolan said.
“The market contraction and competitive environment I mentioned earlier 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,” he said. While we have taken actions to reduce costs, these initiatives have been more than offset by persisting market conditions.”
Vista anticipates its 2018 sales will not exceed $2.26 billion — a 2 percent reduction over first quarter guidance.