Import tariffs cost Johnson Outdoors $1.9m in Q3
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Johnson Outdoors paid $1.9m in tariffs on goods imported from China in the third quarter of the group’s financial year..
The US-based outdoor recreational products manufacturer reported sales growth of 3.2% to $170.8m, but an earnings slip of 7.1% to $22.1m due to costs that included the tariffs, increased expenditure on online development and higher bad debt expenses.
Its fishing division once again led the way, increasing sales by 5%, powered by new product launches from Minn Kota and Humminbird.
Recent innovations included the MEGA 360 Imaging from Humminbird which won the Best in Electronics prize in the New Product Showcase at the ICAST trade show – its 8th award in the last decade in the category – and the Humminbird ICE HELIX, winner of the Best in Ice Fishing accolade.
Watercraft Recreation revenues declined 7.8% to $13m from $14.1m. Operating profits were cut nearly in half to $380,000 from $661,000 as a result of the continuing decline in the paddleboats sector.
David Johnson, CFO, told investors that Johnson Outdoors continues to estimate the impact of tariffs on its profits to be in the region of $5m to $7m. “While we wait to hear on tariff exclusions for other affected components we are continuing to pursue other opportunities to help mitigate the effects of tariffs going forward.”
With nearly $150m in the bank, Chairman and CEO, Helen Johnson-Liepold, said that the group was always looking at acquisition opportunities. “Our success historically has been that we are patient and strategic. I do think that there will be an opportunity going forward when we will see more things coming onto the market and at a price that makes sense, but we are continuing to do strategic research on an ongoing basis and evaluating opportunities.
“We are not growing to be big; we are growing to get the right kind of sales and the right acquisition. I think we could make big mistakes if we decided that we had to use the money that is just sitting there. It is a lot of cash, but it is better than being in a different situation. We are not going to use it in a way does not put us in a better position.”
For the full year to date, Johnson Outdoors reported net sales of $458.4m, a 1% increase on the same period last year.