Vista Outdoor Inc (VSTO) Reports Q2 FY24 Earnings: Sales Reach $676.8 Million
Vista Outdoor Inc (NYSE:VSTO) reports Q2 total sales of $676.8 million, with Outdoor Products Sales at $327.3 million and Sporting Products Sales at $349.5 million.
Net income and adjusted EBITDA for Q2 were $44.4 million and $116.1 million, respectively.
The company's balance sheet remains healthy with outstanding debt decreasing sequentially to $945 million and a net debt leverage ratio of 1.8x.
Vista Outdoor Inc (NYSE:VSTO) reiterates FY24 guidance for sales of $2.725 billion to $2.825 billion and adjusted EBITDA margins in the range of 15.50% to 16.25%.
On November 1, 2023, Vista Outdoor Inc (NYSE:VSTO) released its financial results for the second quarter of Fiscal Year 2024 (FY24), which ended on September 24, 2023. The company reported Q2 total sales of $676.8 million, with Outdoor Products Sales at $327.3 million and Sporting Products Sales at $349.5 million. This falls within the previously provided range. Net income and adjusted EBITDA for the quarter were $44.4 million and $116.1 million, respectively.
Financial Performance and Highlights
Vista Outdoor Inc (NYSE:VSTO) reported a decrease in sales by $105 million to $677 million, a 13% drop, driven by lower shipments across nearly all categories in the Sporting Products segment and lower volume as channel partners continue to be cautious with purchasing due to inventory levels and short-term consumer pressures in the Outdoor Products businesses. Net income decreased 53% to $44 million, and adjusted EBITDA decreased 28% to $116 million.
The company's balance sheet remains healthy with outstanding debt decreasing sequentially to $945 million and a net debt leverage ratio of 1.8x. The company expects capital allocation through stockholder vote to be focused on debt paydown.
Company Announcements and Future Plans
Vista Outdoor Inc (NYSE:VSTO) announced Revelyst, a world-leading house of outdoor brands. Revelyst has also announced a new GEAR Up Transformation Program, which aims to drive profitability improvements and organic growth. The company also reported the sale of Sporting Products for an enterprise value of $1.91 billion, which is expected to create meaningful value by returning at least $750 million to stockholders.
Looking ahead, Vista Outdoor Inc (NYSE:VSTO) reiterated its FY24 guidance for sales of $2.725 billion to $2.825 billion and adjusted EBITDA margins in the range of 15.50% to 16.25%.
Management Commentary
Interim CEO of Vista Outdoor, Gary McArthur, commented on the company's performance,
The Vista Outdoor story thats now unfolding is the most compelling in company history for stockholders and consumers alike. Our recent definitive agreement to sell Sporting Products to Czechoslovak Group (CSG) for an enterprise value of $1.91 billion creates meaningful value by returning at least $750 million to stockholders and locking in certainty of value for Sporting Products, while setting up both Sporting Products and Revelyst, and the brands in their portfolios, for long-term success."
Eric Nyman, CEO of Revelyst, shared his excitement about the new initiative,
While our fully formed strategy for Revelyst will evolve and expand in the coming months, we are kicking off an initiative called GEAR Up, a transformation program that will simplify our business model, deliver increased efficiency in new run-rate profitability improvements, and drive organic growth through new innovation."
Andy Keegan, Vice President and Interim CFO of Vista Outdoor, emphasized the company's focus on maintaining a healthy balance sheet,
In the second quarter of fiscal year 2024 we remained focused on the health of our balance sheet, as we continued to prioritize debt paydown as our primary use of capital."
Explore the complete 8-K earnings release (here) from Vista Outdoor Inc for further details.
This article first appeared on GuruFocus.
