Categories AlphaGraphs, Earnings, Industrials

American Outdoor’s stock surges on Q4 earnings beat

American Outdoor Brands’ (NASDAQ: AOBC) stock surged above 8% in the after-market trading after the Q4 results surpassed estimates. However, the firearms retailer reported a mixed outlook for the first quarter and fiscal year 2020. The stock touched a new 52-week low of $8.19 in earlier June and has decreased by nearly 30% this year due to tough macros.

For the fourth quarter, sales grew by 2.2% while adjusted earnings rose 8.3% to $0.26 per share. The headline numbers came in better-than-expected from what analysts were expecting and the prior guidance provided by the firm.

Last quarter, the company was expecting earnings of 11-15 cents per share on sales of $162-172 million. Analysts were expecting EPS of 16 cents on revenue of $169.17 million.

Fiscal 2019 Performance

For the full-year period, sales increased by 5.2% and non-GAAP earnings came in at 83 cents per share compared to 46 cents in the prior year. The jump in earnings was mainly due to goodwill impairments and lower tax impact. The fiscal 2019 results topped Street estimates and the outlook provided by the firm.

When it comes to fiscal period metrics, American Outdoor was anticipating top line in the range of $625-635 million and adjusted EPS of $0.69-0.73. On the flip side, the Street was expecting earnings of 74 cents per share on revenue of $631.71 million.

Talking about the company’s performance amidst tough macros, CEO James Debney said: “Fiscal 2019 was a year that presented challenges for the firearms industry, including changes in the political environment and reduced consumer demand for firearms and for the accessories that are attached to them, such as lights, lasers, and scopes. Despite that backdrop, we delivered year over year growth in revenue and gross margin, and we believe we gained market share.”

Mixed Outlook

The Smith and Wesson maker’s first-quarter outlook failed to beat estimates. On the full-year front, Street’s earnings expectations are in line with estimates while sales guidance is a tad lower than the company’s outlook.

For the Q1 period, sales is expected between $120-130 million, down $11 million compared to street expectations of $141 million. Adjusted EPS of 3-7 cents is lower than 10 cents anticipated by analysts.

On the fiscal period guidance, revenue is forecasted to come at $630-650 million and non-GAAP earnings of $0.76-0.84 per share. The street is expecting sales of $655 million and adjusted EPS of 82 cents.

Looking Back

Last quarter, it merged its Electro-Optics unit into the Outdoor Products segment resulting in a $10 million write-down. To augment its optics offering, it acquired LaserLyte in January which is expected to be beneficial in the long-term. In the Q3 period, American Outdoor reported better-than-expected earnings aided by promotions.

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