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Thursday, May 11, 2017

Vista Outdoor (VSTO) reported earnings on Wed 11 May 2017 (b/o)

** charts before earnings **


** charts after earnings **

Demand for guns and ammunition collapsed after Trump election, says Vista Outdoor
Vista Outdoor misses by $0.15, beats on revs; guides FY18 EPS below consensus, revs below consensus :
  • Reports Q4 (Mar) earnings of $0.03 per share, excluding non-recurring items, $0.15 worse than the Capital IQ Consensus of $0.18; revenues fell 5.5% year/year to $578.8 mln vs the $565.19 mln Capital IQ Consensus.
  • Co issues downside guidance for FY18, sees EPS of $1.10-1.30 vs. $1.74 Capital IQ Consensus Estimate; sees FY18 revs of $2.36-2.42 bln vs. $2.43 bln Capital IQ Consensus Estimate.
  • "We are experiencing unprecedented decline in demand for ammunition and firearms following the presidential election and softness in the retail environment. These impacts have manifested themselves in our results. In order to address ongoing market headwinds, we are taking actions on several fronts. We are expanding our brands' e-commerce presence to capitalize on the shift by consumers to online shopping."
  • Guidance Commentary: "While we still see indications that inventories in the channel will stabilize by the middle of the fiscal year, we expect the period of market correction will extend beyond that point. For FY18, we anticipate EBITDA margins of approximately 11 percent. Near term, the first quarter will reflect a continuation of the particularly weak market conditions we saw in the fourth quarter of FY17. We expect to generate approximately 22 to 24 percent of our annual revenue guidance in the first quarter. We also expect to generate approximately 10 percent of our annual EPS guidance during the first quarter, as a result of increased promotional activity, which is driven by continued weak market conditions and bankruptcy liquidations."

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