Vista Outdoor reported slightly lower sales in its latest quarterly results, which it attributed to lower volume in the Revelyst adventure sports portfolio, which includes Fox, Giro, and Camelbak brands, and divestitures within Revelyst’s outdoor performance group.
The company did not host an earnings call because of its upcoming shareholder vote on its sale of both Revelyst and The Kinetic Group on Nov. 25.
In the second quarter ending Sept. 30, Vista Outdoor’s total sales were $666 million, a 1.6% decline from the same quarter last year.
Revelyst, Vista’s outdoor portfolio, reported sales of $315 million, a 3.9% decrease from the same quarter last year.
The Kinetic Group, Vista’s ammunition arm, reported sales of $351 million, a 0.5% increase from the same quarter last year, driven by higher pricing.
“I am proud of the strong quarter the Vista Outdoor team delivered as we move towards separation,” said Mike Callahan, chairman of the board of directors, in a statement.
Vista’s net income for the quarter was $41.7 million, a 6% decline from the same quarter last year. Adjusted EBITDA declined 4.4% to $111 million. Vista reduced its debt by $45 million sequentially to $590 million.
Healthier Inventories Boost Adjusted EBITDA at Revelyst
Lower sales in Revelyst’s adventure sports group were offset partially by higher volume in its precision sports portfolio, which includes Foresight Sports and Bushnell Golf.
Higher prices and healthier inventories helped boost gross profits by 5% to $98 million, and adjusted EBITDA increased by 25.8% to $38 million.
“The improved profitability was driven in part by our GEAR Up transformation program which has delivered $11.6 million in realized cost savings in the first half of fiscal year 2025,” said Vista CFO Andrew Keegan in a statement.
Eric Nyman, co-CEO of Vista Outdoor and CEO of Revelyst, said the company streamlined its corporate real estate footprint, optimized distribution and consolidated its outside vendor spending.
“Looking ahead, we are excited to partner with SVP to capitalize on the momentum that we have built at Revelyst,” Nyman said. “The partnership positions us well to continue to leverage our integrated international house of brands and leadership in the outdoor industry.”
The Kinetic Group Faces Challenging Market
The Kinetic Group’s gross profit declined by 1.8% to $113 million because of increased costs of copper and powder, which was partially offset by increased price.
Adjusted EBITDA decreased by 5.1% to $94 million.
“The Kinetic Group continues to demonstrate best-in-class performance, while facing a tougher market than last year,” said Jason Vanderbrink, co-CEO of Vista Outdoor and CEO of The Kinetic Group. “Our adjusted EBITDA margin outpaces the competition at 26.7 percent, showing disciplined product management and demand for our premium products.”
The Kinetic Group was recently awarded contracts from Veterans Affairs and Federal Reserve Bank, and the company is still celebrating its sponsored athletes at the Olympics, Vanderbrink said.
“We look forward to building on a winning strategy and growing the presence of our ammunition brands as we move closer to closing the transaction with CSG.”
Vista Outdoor’s 2025 Outlook
Vista Outdoor withdrew its full-year guidance because of the plan to sell The Kinetic Group to CSG and Revelyst to SVP.
The sale of The Kinetic Group is expected to close before year-end 2024. Revelyst would become a publicly traded company under the stock ticker GEAR in a deal that would close by the end of January 2025 – if shareholders approve, that is.
Callahan reiterated the board’s support of its plan to sell The Kinetic Group to CSG and Revelyst to SVP, which he said maximizes shareholder value and will deliver approximately $45 per share of Vista Outdoor common stock.
“The board continues to recommend Vista Outdoor stockholders vote in favor of the proposal to adopt the merger agreement with CSG at the special meeting of stockholders which will be held on November 25, 2024.”
Kate Robertson can be reached at [email protected].
