Top executives with Vista Outdoor said this week progress continues on a strategic plan to transform the company and sell of its major gun brand, Savage Arms.
Chief Executive Officer Chris Metz told investors Thursday he expects the company “will have good news to share” before the end of its fiscal year in March.
“Our team is now laser focused on the divestiture process for Savage Arms,” he said. “We’ve chosen a financial advisor for the transaction and are beginning to engage with potential buyers for the Savage brand.”
Metz expects a strong auction process will unfold with bids from strategic and financial buyers. “I’m pleased that our transformation plan is resonating with some seasoned and successful brand leaders who want to be a part of this turnaround,” he said.
Metz, former president of Arctic Cat — a Minnesota-based snowmobile and all-terrain vehicle manufacturer — first hinted at his new vision for Vista just weeks after taking over when he told investors “the company grew too fast and beyond its core” after acquiring more than 50 brands over the last three years. A downturn in sales post-election only compounded the situation, he added.
“We can confidently say that our core lies in the hunting and shooting sports market and in adjacent activities, such as camping and hiking,” he said in May. “Our key consumer is someone who participates in these and other outdoor activities.”
Since revealing its plan to sell off non-essential brands, Vista finalized a $158 million sale of its eyewear companies — Bollé, Serengeti and Cébé — to a private equity firm in Europe in August.
Profits from divestiture of Savage and other brands will fund Vista’s innovations in ammunition, a spokesperson told Guns.com in May. The company released 36 new product lines this year and plans for another three dozen next year.
“It is the foundation and bedrock of our company,” Metz said. “We are extremely proud of our ammunition heritage and increased focus will manifest itself in more innovative and breakthrough new products introduced over the next few years.”
And while the market continues its slow recovery — Vista’s second quarter sales declined more than 6 percent — Metz told investors Thursday the company’s renewed investment in ammunition is paying off.
“We’re seeing strong sales in the traditional hunting market categories over prior years such as big game, centerfire rifle, waterfowl loads and heavy field loads which are some of our highest margin ammunition products,” he said. “I’m confident we can leverage our leadership position in ammunition to continue to capture market share and weather this market downturn.”
Chinese tariffs will force price increases on some of Vista’s products, though Metz remained quiet about which ones, telling investors the company managed to spare helmets and sporting optics through regulatory maneuvering. He also highlighted the company’s most recent government contracts — including a five-year, $75 million guarantee from the Department of Homeland Security — as further evidence of Vista’s enduring reputation.
“The strength of our brands are industry leading share positions are what first attracted me to Vista Outdoor … and downturns like the one we are currently facing, it is typically the industry’s leaders with strong brands and management teams that end up on top,” Metz said. “I’m confident with the strength of our brands and the leaders we are attracting, we will emerge as winners.”