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Winter sales help drive Bell/Giro sales up 3% in third quarter, Vista says

Published February 6, 2020

ANOKA, Minn. (BRAIN) — Bell and Giro sales were up in Vista Outdoor's third quarter thanks to strong sales of winter sports products, the company announced Thursday.

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Sales in Vista's Action Sports segment, which includes Bell, Giro, Blackburn, Copilot and other brands, totaled $75.7 million in the quarter ending Dec. 29, up from $73.7 million in the same quarter last year.

Overall Vista Outdoor's were $425 million — down 9% from the same quarter last year, but up 0.2% on an organic basis, excluding sales from the firearms business that Vista sold in the second quarter.

Earnings per share (GAAP) in the quarter were $0.25, compared to an $8.94 loss per share in the prior-year quarter.

In a conference call Thursday, CEO Chris Metz noted that Vista has implemented a "SKU rationalization" effort in its outdoor products division, which includes the bike brands.

"We're pulling SKUs back. The first area where we've see this really benefitting us is in CapEx (capital expenditures). You've seen us taking our CapEx down while introducing more new products than we've ever done in our history. We were able to do this by discontinuing low margin, no margin, money-losing SKUs and product families. So we no longer have to feed them with CapEx ... and we can really focus our expenditures on high volume, high opportunity products."

Metz said the program will lead to improvements in gross margin and sales volume in the coming quarters.

Also on the call, Vista CFO Mike Lopez said the company continues to monitor the tariff situation carefully following the Trump administration's Phase 1 trade agreement with China.

"Phase 1 was a positive for the overall trade relationship between the countries," Lopez said. "However the Phase 1 agreement does little to alleviate existing tariffs levied on our business. It also creates new challenges by creating the expectation among our suppliers and customers that tariffs might soon be eliminated."

Vista's brands have actively lobbied for exclusions from Section 301 tariffs imposed by the administration in the last two years. Bell has been granted exclusions for certain tires, pumps, and saddles. The company also has requested exclusions for helmets, protective gear, lights, and other accessories. The exclusions apply to all importers of products fitting the descriptions.

Vista's Action Sports brands saw 3% sales growth.
Topics associated with this article: Earnings/Financial Reports

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