Customers have been loading up on ammunition, driving a 400% increase in Vista Outdoor’s third-quarter profits.
In the last year, there have been more than 8 million new gun owners as people have flocked to shooting sports and hunting as a relief from COVID-19 restrictions and as a result of social and political unrest, according to the Firearm Industry Trade Association.
The new owners — plus existing ones — created a surge in demand for all types of ammunition.
Anoka-based Vista owns several ammunition brands including Federal, Speer and CCI. It closed on the Remington ammunition business in October and this week announced a new tuck-in acquisition — Hevi-Shot Ammunition.
“Continued strength in outdoor recreation markets, combined with our ongoing focus on execution excellence, resulted in strong top and bottom-line growth across the entire company,” said Vista Chief Executive Chris Metz in a release. “Strong outdoor participation trends that began in the early days of COVID lockdowns have continued into calendar 2021 and do not appear to be slowing down.”
In the quarter ending Dec. 27, Vista saw net income increase more than 438% to $78.9 million, and earnings per share up 425% to $1.31 per share. Revenue for the quarter was $574.7 million, up 35% from the third quarter a year ago.
Results far exceeded analyst expectations. The consensus revenue estimate for the quarter was $528.6 million and Vista doubled the EPS expectations of 65 cents per share.
Vista officials said the integration of the Remington Outdoor brand and ramp-up in production has been stronger than expected and has begun to add to Vista’s overall results for the quarter.
Vista is increasing production at Remington’s facilities as quickly as possible to meet the surge in demand for ammunition. It has had to train new employees, retrain employees who had been furloughed under the old ownership and work through supply shortages.
Vista had spent several years paying down long-term debt and it now has more cash on hand and is looking closely at additional acquisitions and partnerships.
The company also sells a wide range of other outdoor products from bike helmets to water bottles.
During the third quarter, revenue for the Shooting Sports segment, which includes its ammunition brands and hunting and shooting accessories, rose 41% to $402 million with a gross profit increase of 120% to $114 million.
In the Outdoor Products segment, Metz said on an earnings call with analysts that its CamelBak brand had signed a partnership with fitness company Peloton to create a co-branded cycling bottle.
The segment, which also includes Bell and Giro bicycle helmets and Camp Chef outdoor cooking product, saw a 24% increase in revenue to $173 million and a 35% increase in gross profit to $50 million.
Shares of Vista Outdoor were trading at $32.78 per share, up 4.4% early Thursday.
Patrick Kennedy • 612-673-7926