Vista Outdoor (GEAR) 10 May 202020 Q4 Earnings call transcript

Good day, and welcome to the Vista Outdoor Fourth Quarter Fiscal Year 2020 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Kelly Reisdorf. Please go ahead.

you. Thank and fiscal Vista XXXX everyone, and fourth to year full earnings welcome morning, Outdoor the quarter Good call. I'm Relations Kelly and Investor Communications. Reisdorf, Head of

and a Senior worked than Joining Finance Priyadarshi, as Keegan, he years Walmart's Financial CFO year with Vice today Flexport. are more quarter FP&A. Metz, finance most Andy Executive of me XX this that, Sudhanshu and of experience. and of And is a announcing Earlier leader Chris was business. Officer; and our retail recently President VP Vice Officer; new issued news President and global Chief Chief Sudhanshu for He e-commerce before full we our of morning, results. release operations fourth

today copy it measures non-GAAP can release, materials We posted few our a being of investors our to of and in be at transcript greater our along on after financial archived vistaoutdoor.com. have made a If is the on these we've GAAP to website to comments reconciliation you've access financial some non-GAAP business. comparable our presentation measures. webcast to website provide include insight refer the will call their measures attention yet you a event. your and I'd with bring shortly the materials like to changes in our the and not into today call received of with The

have reporting you disclosure by management reflected of segment. the in and our is EBIT reconciliation the with presentation, provided change first also This quarterly The in historical we appendix. is

have reflect strategic channels segmentation this month. our XX-K chain. and reporting share recreation, focus the in segment combination on sports potential. customers, be of the We've supply shooting customers, segments Shooting and of Outdoor further The reporting The growth channels later reporting supply combination our customer find Sports segment filed will similar details You hunting true also outdoor modified which similar and also reflects chain. Products the reflects accessories, which to action and and ammunition and to

Golf you will see aggregated brand Outdoor Our new Recreation. is within Bushnell now today this structure. reflect The numbers

of investors' enhancing to committed We feedback and our our are appreciative remain disclosure.

over the I Securities of making Chris assumptions remind and make These statements, Litigation during these and Act. the today's call and information Vista the to risk will SEC to that listeners Outdoor's us factors on I'd reflect Chris pleased more over we encourage estimates we Sudhanshu, today. to risks release press industries like subject turn information known call, and and Reform turn on Before of now forward-looking safe face provisions the for Outdoor best our our filings uncertainties and review that in These which to statements you to Vista the forward-looking Private and I'm Metz. the call are statements be We understanding to today's forward-looking uncertainties. these statements we harbor based operate. to under

was in XXXX most founded was portfolio We and and capable biggest Outdoor's set the Traditionally, next effective since Kelly. Good team, planned Today's filled our piece serves of to and year Vista for this the Firearms leadership out highly business year strategic marks thank close official call fiscal the Vista the you, end efforts of reshaping. COVID-XX-related of with uncertainty the over morning, the for and people. transformative means couple our the divestiture the positions We business, quarters. strengthened which completed Outdoor XXXX. you fiscal updating the stage seeing and the a with year. for momentous trends Vista across due extra was are little the external created our what the to year a of our we're time situation by new spend Fiscal to on year today, But we XXXX. going call environment, company

Our categories of Shooting dropped their ammunition retailer their shifted when shelves. strategy world's major and segment Sports from managed the largest diversity

we segment our more these since and to delivered we Products year battled headwinds, of fiscal Outdoor XXXX proud year joined fiscal disruptions. I've XXXX. then our tariffs Outdoor that well Our than exited nimble company and Vista Despite more performed pandemic-induced profitable supply shareholders. stronger, in XXXX I'm commitments have and to changes report in chain been and the all on

more our we average than standards and are we return front, high overall leverage safety our In compliance improve rates metrics. environmental operations, financial e-commerce, and In EBIT organic advertising spend. to the ratio our on employee we and and continuing met our increased reduced site XX% On improved traffic adjusted year-over-year. by conversion across

Our positive delivered change. team and answered the call

are that pleased While us much efforts we work are forward. moving our remains, more

response and get COVID-XX most I The dedicated to would in our rigor result we we the like our a Before have and to coronavirus our employees China. the pandemic challenge. challenge been who the recent acknowledge after chain with as perseverance. time the in has formed country, our risen company outbreak January, and managing has team time In team started, impacts for supply of first assist COVID-XX responded a to for

ensuring spread As expanded and effective many work our the shelter-in-place operations our daily to facilities, employees with the group executive virus closer we our through remain this and to restrictions. team, safe

well-being our we've operating and time, families safety the protocols employees, ensure and stakeholders. our their enhanced implemented of During to this

running. to and safe. world, and up financial distribution that Employees cleaning Despite operations our our care our World and enhanced economic and the personal other precautions instituting persisted sites difficult equipment. during leaves mandates. time. appropriate For travel are and functions protective at help also use whose keeping employees local We've to are taking throughout benefits remain mandating consistently guidelines in are that hardship shutdowns nearly of all person, visitor health Outdoor, mitigate Health following all manufacturing have them shift employees imposing open, Organization at restrictions, lifeblood Vista We're and the the essential of the new CDC the committed and for procedures are on-site including we're of and performed we

fiscal During the year. Rico quarter, Eagle was in of fourth the weeks Puerto our for the last closed facility X

In impact of the we during are pandemic. had of guidelines, month been March, masks capacity since the in selling are the X partial results produce but operating we at had operating our operations. in reduced reopened local A month repurposed basic that minor This need April have manufacturing the facility have the minimal for to Following only this facilities operations cloth portion a under quarter. at capacity. on of

local of through governing of all taking May to we for facilities and our We're regulatory And updates to in down. to us to work. on legislative all day supply end in return are instances, In information beginning Tip COVID-XX. our these Additionally, fiscal Mexico the the jurisdiction comply the mitigate were chain today. of our related closely with available in each shut will and will be place actions following Gold disruptions last CamelBak year, orders and shutdown

While our teams we first output are to shifting quarter. for expect create facilities, capabilities headwind capacities a our other do to and reduced

restriction activity fourth said, Our throughout takes impacted of the and place our serving of all dramatic of shift country. online a organization consumer pandemic In That in to uniformly. a pride channels all the we in spending as COVID-XX saw result quarter, the of our not has needs customers.

whose We of additional on increase revolver The of credit accounts frontlines. were will this a note, access present has balance major role donating In on disadvantaged a result goggles restoring nonprofit who debt in sales, surplus as PPE light dealers. $XXX are veterans have as revolving missions management to facility. our wherever traditional excess ensure the partners While sheet for with to the liquidity our our out for efficient repurposed retail also network care in health brand sector, as a We've the opportunity headwind possible, asset-based outside. the of capacity ski the a liquidity we a cost access actions direct-to-consumer million these currently million We're capital believe we and flexible, has workers our of brick-and-mortar roughly by Giro for partners will well efficiencies standing in independent snowboard our and and our maturity brought cash working kids, thousands to a presents and nonprofit getting best of the significant our are. also and further it strong in pandemic our profile. country. quarter. Of under well-managed and taken to We have COVID-XX, play we able $XXX e-commerce

not and facility late our $XXX credit million revolving XXXX. year until Our calendar outstanding both notes, in senior of mature do

given the retail with vigilant worthiness, the credit in multiple customer months. be last store to X closures the continue also We

established communication to We major their ensure partners of revenues. channel continuation consistent our have business with

brought exceptions an select in inventory, in the supply we our and outbreak existing will as spending to New did a suppliers. through executing our support anticipate At time, fourth essential company suppliers customary most impacts of earlier from expand of dropship retailer many initiatives of expand around quarter, have chain pandemic a be to their where middle back supply We XXXX near and our the of Currently, the closed innings the outdoor closings. planned the to online fundamental a our disruption transformation the for others China with businesses. are We've chain. Outdoor. Case direct-to-consumer need In A be experience what in categories, situation in this expanded to presents we traditionally our in they have are demand our seen we our is purchase online are maintain time stores. would commercial expedite investments where been our account beginning innings retail economic partners and levels. Vista able many shift the of our it accelerated by in fiscal of number our Year end store transformation as Where dropship that quarter, to have particularly redirected the with X the helmets we seeing retail The believe pandemic, While early year the quarter. ammunition, normalize and in locations, are attempt been to Recognizing first of behavior, we mitigate notable has interruptions number brands. in strategic consumer upon Chinese operations CamelBak responded of have Asia our this at key demand rebalanced storm channel Golf demand response our plan. capabilities from we and/or in producing strongest the for products efforts Bushnell accessories chain the in in customer the at stranded we've sites, we recently Year store believe continues high weather otherwise retail support COVID-XX. retail and capabilities by why can in during the New in path direct-to-consumer it inventory the and move at and number marks to supply bicycle right in brick-and-mortar possible, point, consumers the Where appropriate accounts. of online. cannot to cooking right the the transition we

or laser-focused fourth on and foundation ratio exceeded it flow. to X.Xx, exceeded and for This share was strong. paid earnings in financial our We for XXXX. Our our in have The off our years last been net expectations. since improvement We fundamentals. has our and X quarter the growth. platforms expectations met lowest for in cash been investing leverage reduced noticeable free has our per stabilizing repairing We strategically a debt

the quarter continue also in Our in thoughtful orders, benefited instead seen tangible this of improvement personal products engaging the outdoor demand for reestablishing has operating a delivered profitability We're adjusted ammunition results. of we quarter, in categories. mentality consumers to increases We trends EBIT. increased. in from and to crystal business increased a our demand see shelter-in-place a ammunition our year-over-year driving a yielded on mindset that and XX% we an increase brands. on demand and discussed crystal third seeing We've of has Building many many significant In hunter's amount we organic consumer for activities amidst saw levels and ammunition. protection approach demand fourth in our strategic of the call,

well. we for increases material demand in Additionally, rimfire as also saw lines

in to evident is within demand tend by we e-commerce volume. as ammunition This lag before, as our see discussed background effects well channels a we've and retail As purchasing sites. effect driven direct-to-consumer our our both

player largest we the the and us operations efficiencies in and have quickly investments manufacturing made and enabled consumer our to improvements to respond leader share market category, to changes the rimfire in demand. have As

Going margins in to to our improve. business Ammunition forward, gross expect we continue

on margin efforts industry We will continue lead to the our and efficiency improvement, recovery. pricing

surge that expect drive opportunity payment the in provide working will us customers. our demand ammunition We efficiencies capital terms with by to also normalizing an

result surge this into ammunition ammunition are and the indicated in fourth pandemic. demand that categories disruptions roughly digits. the optimistic headwinds The demonstrates roughly respective the we offset how last. our from will strength grew largest our recent coupled unclear surge forward by heading with driving new is inventory about quarter of category ammunition through tax the This a from most our some the mid-single based today, available low economic market year in channel federal benefiting the will an as believe election introductions we're it of commercial in XXXX product domestic COVID-XX With While excise long business grew going year, in it other and marketplace. demand product market XX% of strong, our share calendar demand our in by

to made we maximizing growth to translate the growth this look we robust profitability forward. will and in going expansion have we improvements confident As demand more downturn environment, are the that during ahead

share performance extends contracts efforts for to agencies, enforcement as We've law with in in leadership international Ammunition recent law our and product well. in successes market Our our business. secure nation's enforcement internationally seen reputation channel our new particularly

and highly prestigious competitive the Police Victoria example, in brand our Australia. for win both the secured Federal, a Force For Force a a is award contract on key training X-year for new with This and duty ammunition. Speer

continue growth accretive of opportunities. pursuit to by this placing the strategic in focus We margin channel on prioritize

lockdowns consumers We build year-over-year the quarter. accelerated we continue our e-commerce growth the move only COVID-XX sales our The in in direct-to-consumer channels. during online. presence achieved to record pandemic resulting fourth and brand's have And

the ends. after even continue pandemic to trend this expect We

for direct-to-consumer realignment reflect in result expand new to execute continue XX traffic rate in to of of better of hunting end presence and a accessories our between our approach consumer brand focus, X optimize digital our approach insights a on key Total strategic we is prior In will our hunting or strategy shooting XX% ammunition and for the customers Giro We be better and enhanced Blazer, and quarter be helmets, for fourth the during our and consumers serve quarter and roughly the a the shooting increased Bell the over year. end conversion one better leverage basis to increased roughly coordinated refinement area our by channels, websites quarter consumers. launched in points Speer. site upon To We BXC the and year-over-year, the company will channels. our teams our our by and reporting segments We'll taking experience believe alike. commercial opportunity markets. more our CCI,

to greater CamelBak Another for clubs we CamelBak sales and teams where in unique Horizon between contribute These collection. the Golf shops closely Bushnell to new brand that market launch will programs worked is area are entered of drinkware opportunities X stainless the the steel our for with create and have growth drinkware and its vacuum country together organic Pro year. growth the creating brands. synergies recently

members, Frances strategic as X announced recently look and week, pursue Board contributions priorities. forward new welcomed earlier to Philip we Utter, of who we Lastly, and our their we addition this the Lynn

Before said, has him build with joined a his his outlook, pursuit CFO. future work addition, working has today we take Mick Vista thank to endeavors. of a to I and the minute been build, a I'd tremendous well through With us our From partner to over made in for I'm team that of contributions I'll efficiency of and reduce relentless get the he couple like grateful us at tireless to his Mick and efforts And the capital add Lopez results growth. to to stronger foundation it helping I'm has like remarks. a that I'd ensure future smooth helped wish on Sudhanshu tenure. to leverage for us Sudhanshu very turn a excited Priyadarshi, outstanding for his this world-class is for the as successful because April he Outdoor. as in introduce who Sudhanshu XX. formally into working

past My Chris given all efforts appreciate quickly Vista's and we team for on mission me I into experience, excitement objectives connected many have brand look ahead as including Kelly. your the leadership organization today. right be to get of trying integrated over so has now. to members increased and opportunity our Thank I weeks to e-commerce and my the as challenges I with only months and organization's few COVID-XX. Vista's across face forward here and you, weeks. respond organization to the in employees in the growth adopts Happy

you have excited team. the We're Sudhanshu. to Thanks on

review the results and Let's our from the fiscal quarter year.

From impairment business. for organic businesses. our we date within mention our worth our fourth discount Our $X. goodwill a of lived focus required accounted This Also, than annual and intangibles our standpoint, noncash adjusted of testing. to to most price This goodwill stock lower lower when us incurred the higher will price on a GAAP in impairment. goodwill goodwill exclude divested was us largely of in as valuation quarter rates of which attributable results $XX results. comments Vista result testing, today a and use segment where the January impairment results will million the ammunition $XXX It's noted, on Outdoor million with impairment Outdoor stock process, charge impairment annual was X Products indefinite for noting of our leave a our effectively valuation multiple

Let's made. have the look at we deleveraging progress

levered. building sheet, over year, to And $XXX our by a debt state roughly our commitment net balance leverage desired Xx achieve we to being fiscal of debt We the Given net million. during track ratio year roughly a the X.Xx. ended and of on resilient stabilizing remain with improved we

results. consolidated our to Turning

over sales million, and within quarter, largely of review year the prior the newly business down an the prior quarter. year. quarter recorded the quarter year a Let basis, our international the me we $XXX the provide of segments. X%, sale aligned XX% In million compared in fourth our Firearms The total fourth highlights revenue. adjusted sales accounted second this the were with of large loss first down the reflecting of results company then for On $XX just that organic in shipped order in timing for

call, quarter, order ship status not quarter fiscal third discussed on large to this it the this our the 'XX international in did expect the fourth FY earnings order impact of and in we shipments Regarding year. we

of expenses On decreased year. year. operating X% organic On with fourth XX% with by compared with year XX% is with million prior organic basis prior compared million million segment. is operating the full due up $X.XX and million in quarter. negative and compared On The rate the nondeductible expenses EPS Full tax decline adjusted year which were of XXX% the the Relief, profit rate organic quarter. is the improvements down and with year year million savings The tax cost prior or enacted XX% $X for the but basis, basis, The Adjusted and XX demonstrates year, class quarter up amounts prior margin quarter primarily basis. year. was driven in full $XX Adjusted the which or was the affected an cost compared the basis, $XX.X the year the lower due compared efficiencies incurred down success quarter. year-over-year points of compared Full reserves across favorable from was Full all of significantly. an the adjusted was quarter expenses in compared lower million, $XX March expense year. year year. year expenses interest of for to with rate $XXX over balance interest by the have The on quarter significant or adjusting was of organic international XX% were negative the prior dollars the positive our of brands. our rate higher XXXX. organic with quarter with the expense in The prior gross Products year, prior million from rigorous with on Aid, in by This prior Economic put in prior offset year November profitability an company compared year tax up million. initiatives. in cost-saving year by and is benefit for with prior of the X% XXX% a shooting in and the year partially prior was in X% the moved focus an million, quarter. from Act and year compared Outdoor a $X.XX year. adjusted year Any XX% an EPS compared $X.XX billion fiscal the adjusted EBIT largely approximately these operating basis, cost continued was roughly quarter, gross million a $XXX basis, on adjusted a lower year was basis. robust and decreased commodities XX% the this the The Overall improved in improvement XX% the for adjusted of $XX or release initiatives prior delivered X% $XX for were XX% credit The order fourth organic operating with to sales The the $X.XX, For period. to year-over-year prior Coronavirus $XX the fourth result the profit demand was million was over quarter, down was expenses Firearms. EBIT improvement Adjusted of $XXX to also reduction down year. decreased fourth quarter gross by prior prior Adjusted XX% prior operating the full the accessories fourth facility compared decrease from and million XX% to on decreased the expenses gross initiatives. organic profit $XXX an up We year over year. tax On hunting delivered XX our to $XX.X the reduction disciplined the XX% with controls, Security asset-based down on in fixed was an tax with rate sale the as place fourth benefit due tax calculated debt in

EPS was and full of strict measures Outdoor to our strong guidance Products cost a than Our capital of driven for margins throughout slightly control growth on improvement $XX and results. expense entire product strong This overall was and year cost adjusted improvement million. also savings the products, from company. savings in Free by was SKU initiatives, which the the driven by million, a flow exceeded focus with our our X%. which collections, laser $XX primarily organic We new was inventory year. improvement initiatives. roughly rigorous in the expectations rationalization EBITDA This of compared reduced of result tax EBITDA contributed margin cost cash expenditures total The $XX management million prior year to better our delivered X.X%, was

a for recorded profit demand the Gross lower Turning to in million the over quarter down the million, quarter fiscal cost sales $X by reflecting of outdoor quarter segment $XXX organic the of with offset year of On segment retail of the improving down $XX million Outdoor were the basis, profit helmets and result result XXXX, reflects XX% to million, basis, the channel improvement the was which reflecting demand the quarter. $XXX the volumes as for the the increased quarter, $XXX year on prior This year the year, and lower headwinds year fourth the of of a In In the Full driven initiatives. down full Eyewear. prior generated sales units. of second compared On overall profitability by near COVID-XX, the our bicycle segment and a the gear affecting Products. year-over-year of organic accessories a Outdoor continued prior rationalization $X sale in quarter, EBIT down year and majority our year demand. quarter, product success compared full in cooking Products the prior X%, sales million continued the Gross Adjusting $XX reflect in million XX% mix. in compared with year. X% from the X% was an with Eyewear was million, of end down the segment our for profit basis, was increase in quarter. compared with business top efforts the despite EBIT underlying is year SKU as an the million and year, gross for quarter. reflecting EBIT, prior line our generated X% $XXX prior of market headwinds sale savings of

that quarter. latter our large commercial the would shift been during by partially The part of ammunition single the Were XX% turning last to of the Shooting digits. Sales down this shipment for accessories quarter have were the large Hunting to in demand due Shooting Ammunition down the reflecting quarter in for with of Now to fourth offset prior increased of were fiscal quarter XX% fourth quarter. in fiscal the and year. fourth Sports. down delay the when X% the the compared shipped in by Firearms. order decline international year $XXX were the sales Ammunition it quarter a segment up order sale ammunition prior year million, large quarter compared international Organically, not a this X%, the high XXXX, was was in order, an timing due the that year in of with and sales down

up quarter driven nearly basis year up basis, reported profit large the was Fourth segment accessories, to expansion of the was compared in rate. due growth down prior favorable XX% sale at sales year, disciplined products year gross down the introductions result Firearms. million, partially prior was shooting of profit year, increase For Firearms. but point the was gross new the was execution XXX billion, sale gross organic or Full XXX of the and X% lower a year full new is of down $XXX profit points. when sales. This X%, prior XX% XX% higher million for of in to an with gross and higher face $XX increase compared prior with margins, prior in offset commodity generated year, year organic full expansion continued order X% of of On primarily Firearms. is segment saw an demand EBIT the international and due hunting adjusting in the $X.XXX quarter, down an sales of the the for organic product to compared the when the year, with Firearms. demand sale higher rate e-commerce-related the pricing. million roughly $XX adjusting over the to segment basis, XX% profit The of by increase On which the due a by a and quarter the The sale XXX% basis quarter

For the an full year, the on $XX XX% organic down in basis. up but is EBIT, million over prior the XX% which year, segment generated

to we grow the Products demand will a past to for is full a During as better, to generating market and now. profitability and are were and in and have improvements we enable for improvements and shifts and to tangible objectives digit our laser-focused able Shooting we achieved Outdoor high a respectively. strategic improvements These point stronger, our The fitter X year our the downturn, to year we're are efficiency proof faster gain mid-single founder's most initiatives team's seeing teens Sports make fiscal testament with recent much continue made and us the segments, high and the profitably the - that share. results. more mentality, challenging passion across Overall, Ammunition initiatives have even in react cost our of on dedication to consumer been savings years to during pleased us

and uncertainties the recovery, visibility many the the limited economic around we our Given health pandemic quarter. around have timeliness first beyond

facilities 'XX. keep However, strong assumptions able provide fiscal as the the commercial the our our open. to given of e-commerce ammunition year quarter of status ordering strength continuation manufacturing distribution include market And are setting for guidance market. us ammunition patterns, current business our In and we allowing guidance, our to this essential current of and first

first our of our have with sales closed the quarter fiscal we have, due first to range declines compared the divested however, million guidance in partners in $XXX been million factored COVID-XX in the businesses. for excludes prior year, million We Therefore, which to expect pandemic. is, retailer channel in $XXX whose at stores the quarter $XXX the

expect share quarter of a adjusted of a loss breakeven year We with quarter. $X.XX of per earnings the prior range $X.XX to first in in compared the loss

and from benefits include continued in cost assumptions improvements from commodity tailwinds initiatives, Our costs pricing. savings

in modeling fiscal our line transparency to annual addition, your generally assumptions, In expect year and overall with expenditures capital results. support 'XX we

flows the results. quarter. full strongest cash expect in seasonal free annualized on year be quarter half our We profiles, flow the year the expense than free quarter interest stronger in using fourth 'XX previous sales. anticipate to We the of in cash typically flow year occur due historical FY cash first Based to back

of continue for that this anticipate channel next We and variety for plan the over suppliers our will of pandemic the effects play We change proactively scenarios XX could months. partners. customers, a to accelerate that out

the of will operating been chain cost reducing harmony two us on the our transformation, years our years focused these of accelerating increasing make e-commerce capabilities. expansion streamlining come. structure, financial improving the leverage, have debt, we For and efforts of supply channel We believe the stronger our past our in creating resiliency to

has and around The positive us and world. employees believe metrics, shelter-in-place should showing and to the well people bringing society Vista experienced a that life believe are world eventually the emerge walks our and the our outside. of Yet from serve move be as effects major pandemic, ahead for the source neighborhood outdoors. we to surveys natural lives, around enjoyment variety we Outdoor, shift the outdoors to without our been and that We the from and individuals are long-lasting mission millions positioned for mission outdoor meaningful a for essentials. live healing more of helping shift of has the comfort, world healthier, As fulfill everyday of a the and

Now take we will questions. your

[Operator first from take question Instructions] now Jim We'll our Chartier.

is open. line Your now

could quantify chain the disruptions quarter you first was wondering on impact the I Products kind sales. Chris, of for if of first supply Outdoor

Yes.

pandemic we it's are. going at very other - the certain affected question. that So still that's retailers as are a good We the categories closed that that given know the crisis. perform that going products to we obviously, Jim, something well in offset that's to look by it's be categories continue are And when know to consumer are

think QX guidance haven't degree midpoint even the in to it's be guidance, Products our sales Sports. in think we for quantified previous and the our offset down. Products. Outdoor we're year But still in from best on of we will a we what So guidance Outdoor broken by Shooting out Shooting versus Sports can And adjusted that for view a Savage, in you taking see seeing

an And line yet. the this though. lot it. in We're will the the really so new year way that introducing light say seen on and hasn't golf that's and of Products We've I awful drinkware products. Outdoor of with exited day we're our CamelBak calling

So those That as people we guidance. is out. seek gets shelter-in-place products start the lifted, are that optimistic into will our to built not

the as what Outdoor you we've guidance, the XX business down XX past imagine, days given over on Our line. to seen a reflects Products top can

an then And And know excellent large the for is exports into the for? sense in international give looking on business, environment? orders ammunition you restrictions can a Are on the commercial your there what fourth shift I Okay. backlog current us quarter. any then Ammunition

Sure.

all, as extremely our are don't inventories and environment, So And to supply imagine, that healthy. everywhere, wholesale in very first in are But channels, the discuss the it's can Jim, demand. factories backlog, channels, just this full backlog. of retail terms out across lean, running and we you of

through soon. first anytime as frankly And subsiding go that we're we forward see beyond. quarter don't the we optimistic So and

courts. being able but a year. terms that in ship international changes We in during restrictions, don't able ability been the issues first has large we some order part In fiscal the due to in quarter, in places in don't it before required There won't contract - the of be any that will some the fourth the to to inspect in more quarter. able lifted to ship. that But anticipate are and the - We fact the to travel the shelter of to to be this in ship lifted, frankly, of issues left that that the year. it the restrictions think and regaining ship be were our fiscal requirements played we and the restrictions ship we it product will see it was anticipate

our next Eric We'll Wold. take question now from

Your now line open. is

provide on around questions chain way on details of what of already of going obviously into of of to you just have guess QX, kind any kind visibility reopen. percentage dive couple more I to plants little corrected bit have results, when those supply questions. still supply but issues the a the issues A to previous you chain impacting less maybe more the in terms been impact are which

to get that would based what quarter? on a supply chain linger the in know, much of issues we trying currently sense second Just of how

disruptions. and come chain group, put go Chinese the of So of resulted New team the in Eric was did job work remarkable outbreak of ages part, workers place. did the it. the supply large which like that saw in supply back was chain in rest coronavirus a home, Year the shelter-in-place some It our China It disruption, in But restate terms handling not ago. feels I'll in to

and well and supply up the And they forward we to fast disruption chain running. team back channels sit we as remarkably today. see move worked as get chain any Our don't supply our systems in

that during the quarter. So we corrected largely

and some our particularly chain good, Golf that be and that disruption to have to anticipate new should forward. We're that go not the but for fiscal As know CamelBak us. continue supply this I into any position, mentioned, products, year in in healthy we we year shifted had

plant complete original reopening of was of sense what I happening already you of to the been into towards is the open and a how guidance impact before. back Mexico to there quarter - been corrected where currently while comments end isn't kind May, and expects know? Okay. Maybe on of a what's supply visibility versus [indiscernible] that out I'm - I noted in stated based there, adding an trying the on guess you get CamelBak plants even as much what's and the the

little. Yes. Very Eric, very little.

without couple of have, still units. disruptions business. brands supply we that much our too versus chain the we've getting business got immaterial - of the they rest into affect frankly, it's Outdoor our and So Products a But detail,

So It's the disruption us. as walk I to big environment. away of more anybody don't supply retail chain thinking a want issue for

to XX% grass the green our if So golf across are you closed. of look products, to locations across XX% world, XX%

it the closed. retailers, is as very You they're look issue. at our our some a issue major businesses facing, and that are view much we That of short-term

of of shifted just online, well. has partners shipping But ours in closures lot buy been the We've got items. their essential retail have their as that very these business also couple - was of store direct-to-consumer do you've nimble big a as that e-commerce growth seen who frankly our a capacities to their and dollars really really, Our retailers are well March gone month of enacted. very

are we going closures retail business, in our and demand be categories we're will So that to what simply we in outdoor that you, in that lot and higher our like seeing other and that I businesses. being to overcome play cabin the say short think term. consumer helmet other what have and the People our going as a consumer are cooking is bicycle our issue But they're manners well businesses, that recreate business, products our than fever, of not to think shelters-in-places able products like are lifted, activities to. lifted, shelter-in-places in in we products are business

guess question That's helpful. last I then.

inventory seeing ammo of demand channel. essentially shift end terms of on your update over to in what us With And buy consumer an you levels maybe in demand in how from firearms dealer in maybe the the the kind recently, strength buyers. the seen Walmart give and you're update terms much previous of we've other of

Yes.

and announcement, job the remarkable following to the that with key in to accustomed our of Walmart shoppers to shopping. team, locations, Walmart partnering ensure like customers did a were immediately other was that geographies product So shop our

faster Walmart than that volume happy we of So that lot to going for we all filled moved void. as this a make we into thought that say we would. And to up year, of quickly we're I'm

there supply there. We're producing current more and inventory customers we chain was can. some demand supply wish environment, is In in out much healthier. to as able our that they as the couldn't customers in not I as of current Honestly, we're be stock all the terms mean, same of I in the wish environment the thing. the And our levels.

it's So that a now. right again, see good subsiding anytime for don't we situation And soon. us

Please Brett We'll Andress. now next take go from ahead. question our

bit more have year-over-year Kind as of a do on side. retailers, could help retail the longer orders I you question, visibility would basis the frame in imagine, what up read how us into if then a back are building And time little looking lead like that off Ammunition maybe some months? look much you maybe on coming inventories to the here

Yes.

year can the they measures is So out, you, tell firearms an Brett, year, exact this is all in know industry healthy. exactly that good exact inventory which and leaner, time product what's to thing. moving levels and and have unlike I serialized, a last down inventory science. year-over-year, But This were we their they're it don't at

about very positions. retailers a inventory good So customer feel to their our

continue to continue to to does, the channels. all And out able our as to demand even does start In to fill continues. facilities run whenever have shelves if to the be off, we to fact, we're taper fill it going to those still have it

calibers capacities we're that hard. and are in most our our capabilities demand. working We've shifted and our organization extremely So products to

calibers As now. X-millimeter the one is hottest an example, of right

our of So down. we've been our X increase shifted that more times years and there done with down same seen well. to so some could an more thing to question over we've rimfire to as we your rimfire, shifted and take where we that's in capacity capabilities lead the that now, We've

to we've past the of looked down. our more couple as efficient, years, times have and become So the out - over lead facilities our lean as come

much, this to to be able those as be we fill to in orders. an we're position can all a customers' better And much working so in as we're to increases our time, we're But responsive and hard is demand. much - unusual

this just potential as year? down retailers Got question it. I stocking election has an the ammunition to we've demand prior are I mean especially inventory here. ammunition retailers past know their for levels. that in levels bigger picture the rethink far think ammunition to And do take how a structurally But the talked then shock in to you as

good really question. a it's Brett,

coming their absolutely that later, of probably retailers a question out they by is were all inventories worked think X years, they'd XXXX stung level there's general group too And a years down bit. election, we're want you, to I speak lean in them with to them for get stock I can stocking many levels. don't customers in positions. to say the just having tell But their with I is healthier, no the wholesalers conversations X.X that think respects. to need our larger partner them terms I in of we

ahead. Khanna. We'll now our go Gautam next question from Please take

Your is now open. line

I hope on Dan well. all you're Gautam. is This for

about order quarter. international talked last guys you So a large

remarks briefly. maybe did already? prepared been you in happen that the on that? hold? to that put what's Or think it the deal Has But alluded I with

No.

Dan, was quarter. we order in fourth ship being that that able anticipated So to an the

year. coming ship For of a reasons, it fiscal this variety and delayed, will it got

also we but So we're comping a quarter year prior where go shift, a because only double expecting for us of bit a of we were shipment a fourth off that to out. not had whammy similar

is lining shipped So through. lining, silver it's a order comping that year. But comp didn't a to and - go of we're silver an off and tougher there's this always the going

Got it. it. Got

Okay. that? And the what size of was

that customer. size as our of the reasons for with contract up We part don't confidential

know problem. would you discuss last. scaling And on up extra production, going on any modifications then just surging supply kind responding the exactly deal you're what is - the just side the Could to of that's that? how side No don't so ships, Okay. we long how right and obviously, And helpful. now, with is if you're Understood. demand supply be

Yes.

ago. didn't note to of Dan it group, an the the surge we're in just days is rest and for Ammunition not So just I seeing XX important surge, think and overnight the happen that it's

we start year. we NICS of increase by started the large you checks of one or As is number most really to, us lag NICS typically in of for of a see know, And checks. leading and to months a indicators the NICS to last quarter middle checks

business to form, increasing our true started So months Ammunition ago.

firearms categories really we've think what just seen the hunting what have our continuing so general order been X-millimeter seen from as or demand. X-millimeter we and some we've a increase is general the But Sports we've we is and it for of what industry, the very seal in health subcompact time, the participation move encouraging. carry, the And some the anticipate Shooting in that from compact And year. brethren in really of whether I is And of the saying long that very, that a the our underlying be recently is good, election product. we're you, increased COVID-XX pandemic demand into an innovation seeing has for

been demand, So we've most because more of to lay the we've able much more capacities like calibers we terms in things more to a on and selective in initiatives in shifted different responsive, And efficient. to lot and past judicious past. lot a we're the over that that a jump taken out. feel our have capacity really are our than the which but when also production bit years be going being quieter, we is be of X we've done the way We're

good in spot. a So we're

question now Meyers. next our take from We'll Ryan

now is open. line Your

with a previous just First of one follow-up questions. for me is kind

market for what environment retail just to guys really aren't a comments expecting surprised QX a Are Outdoor that in you Products be guys' given ammunition and higher. weak? little just in consumer your So backlog, we've guidance the sales healthy really, bit seen we're on

Yes.

you we're we not unrealistic It's is gun imagine, the consumer we're there, as good This times. can in that we and it now. we right? time best out Ryan, out lean it. guidance environment set that like think unprecedented the right But can to opportunity forward. think there little a called we've we're call the One any in So is three Vista products company Outdoor coronavirus shy, in We've I optimistic for new kind is got a to that the What really, this probably the reasons of for is about environment. going team. is think here a battle-hardened seeing prospects me lot for really a this of we're feel I good current companies. very share why There's about

And what as our well. control our to that to taking next Now get about my group lot really planning we the out. spent products and we're fourth We've time peers our we listen, that companies. when than in consumer and lot And that's the that BXC it at action a that faced had and facilities we're company's do cost we're gotten in of categories lot ago. to can grow in of We a to, products my the - would you And took is the numbers, for environment. can our a hungry leaning the and I've they're We've but continue is do continue in a good we and we'd to And reflects talked X going out we guidance things of back colleagues in quarter And to system. international it got of to we in with not then the crisis. shipment channel. best a to more We is history. years taken different We margin rebound it feel destiny. to third we We're COVID our half. win. Well, our them see should we're mentioned have product quarter, phase our that lastly, got of said got I we've going inventory promised coming the more don't, back debt get the levels, new organic expansion if that the they before, and our growth, normal the line. SG&A, gross

to out Outdoor we're as more be this all cautionary build we're lean to Products didn't your we to and it thoughtfully can a as optimistic understand We again, as than be we're to business, quarter. where we're we're trying help models guide going. trying So And guidance. on to back. as our you business, in our that is Ammunition going much bounce our with cautious And trying

to can a our increase costs, in gross rate. So margin the the drop-through our get improvements you and little that see to made and the at in bit nice line extent a lift a see we we year-over-year EPS you'll sales, more that

that's definitely Yes, helpful.

think a any thing. expenses How guys guidance lot I up this expenses operating you should XXXX. good done is think With XXXX? cutting in of sort about environment of that in a said, your we being operating here in

Yes.

We anticipate environment. don't don't Like we - cutting mindful more. companies, anticipate the So don't very are certainly more. most of we adding

because the So we gated of expenses. taken, actions we've

on - companies are levers the is like We on the and we that necessary. the have done lot can break foot to here pull - like our what of brake. I'd We're this hands our to both the we've is on if a feet image and tapping got But accelerator. putting we've I'd the project

things insights in despite put with out lead with some inventory that levels our on of starting we've the dropship we increased over We've see consumer our We're investments taking partnering reduced times. tie to it. DXC amount We've our think can XX we've these customers will of with service We're other the despite You websites. system. the and help reductions. capability accelerate made and together online cost

areas sales. hold sure things fair and get as more. to we to relatively flat as our in to And the do share costs invest going lifted, continue to that percent our going as a to we are we make So take that we're

one last me. then for And helpful. That's Okay.

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