Why Johnson Outdoors Shares Dropped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Johnson Outdoors (NASDAQ: JOUT  ) were getting left out in the cold today, falling as much as 16% after reporting fourth-quarter earnings this morning.

So what: The maker of outdoor-recreation products fell short of expectations, posting a per-share loss of $0.35 against estimates of just a $0.09 loss, and down from a $0.32 per-share loss the year before. Sales increased 3.4% to $426.5 million, mostly because of its recent acquisition of JetBoil, the world leader in personal outdoor cooking systems. The summer quarter is traditionally a weak one for Johnson, which partly explains the loss, though CEO Helen Johnson-Leipold said the company "made progress toward our long-term goal of sustained profitable growth."

Now what: Considering the fourth quarter is a historically weak one for Johnson, I wouldn't be too worried about the quarterly loss. Full-year EPS nearly doubled from the year before to $1.95, and beat the estimate of the one analyst covering the stock at $1.89. After a sharp sell-off at market open, shares recovered to trade just 6% down, which seems more appropriate. I wouldn't expect any fireworks from Johnson at this point, but the stock should be more stable going forward than today's news indicates.

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