initial public offerings (IPOs) trading on American exchanges

Tuesday, May 1, 2018

Vista Outdoor (VSTO) reported earnings on Tue 1 May 2018 (b/o)

** charts after earnings **


Vista Outdoor misses by $0.07, beats on revs; guides FY19 EPS below consensus, revs below consensus; announces strategic business transformation plan  
  • Reports Q4 (Mar) loss of $0.22 per share, $0.07 worse than the Capital IQ Consensus of ($0.15); revenues fell 1.3% year/year to $571.2 mln vs the $519.41 mln Capital IQ Consensus.
  • Co issues downside guidance for FY19, sees EPS of $0.10-0.30 vs. $0.87 Capital IQ Consensus Estimate; sees FY19 revs of 2.205-2.265 vs. $2.27 bln Capital IQ Consensus Estimate.
  • Co's Commentary on Outlook for Fiscal Year 2019
    • "Fiscal Year 2019 will be an inflection point for our business, and our financial guidance reflects this reality. Increased commodity costs and lower volume will pressure both segments in the first half, and higher interest expense and unfavorable tax rate will pressure earnings for the full year. In response to these challenges, the company has taken several cost reduction actions and initiated targeted price increases, and we anticipate further actions if commodity pressures do not abate. As we move through the year, we anticipate sequential, quarter-over-quarter improvements in our gross profit percentages as a result of our actions. Our strategic transformation into a consumer-focused, less complex, and more agile business will position us to unlock the true value of Vista Outdoor and its market-leading brands."
  • Additionally co announced its strategic business transformation plan, designed to allow the company to focus resources on pursuing growth in its core product categories. 
    • The plan is a result of a comprehensive strategic review, which began in November 2017.
    • The company plans to explore strategic options for assets that fall outside of these product categories, including its remaining Sports Protection brands (e.g. Bell, Giro, and Blackburn), Jimmy Styks paddle boards, and Savage and Stevens firearms. Vista Outdoor expects that the execution of this process will significantly reduce the company's leverage, improve financial flexibility and the efficiency of its capital structure, and provide additional resources to reinvest in core product categories, both organically and through acquisition

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