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Date
Friday, Feb. 6, 2026 at 11 a.m. ET
Call participants
- Chairman and Chief Executive Officer — Helen Johnson-Leipold
- Vice President and Chief Financial Officer — David W. Johnson
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Takeaways
- Revenue Growth -- Double-digit increase reported in the first quarter of fiscal 2026, attributed primarily to higher unit volumes and supported by price increases in response to cost inflation.
- Pre-Tax Loss -- $1.3 million loss before income taxes in the first quarter of fiscal 2026, significantly reduced from $18.9 million loss in the prior year quarter due to revenue growth and margin improvement.
- Gross Margin -- 36.6% in the first quarter of fiscal 2026, up 6.7 percentage points from the prior year, driven principally by overhead absorption from higher sales volumes, as well as pricing and cost savings initiatives offsetting increased material costs.
- Operating Expenses -- Increased by $2.1 million year over year, mainly from higher sales volume-related expenses, partially reduced by lower warranty expenses.
- Inventory -- $103.9 million at quarter-end, a reduction of $17.7 million compared to the prior-year quarter, reflecting improved inventory management.
- Dividend -- Continued quarterly dividend payments maintained, with the most recent declared in December as approved by the Board.
- Debt Position -- Maintained a debt-free balance sheet.
- Fishing Segment Performance -- Both Minn Kota and Humminbird brands achieved solid category performance, with strong demand cited for Explorer series and Mega Live 2 fish finders and consistent demand across trolling motors.
- Camping and Watercraft Digital Investment -- Ongoing digital and e-commerce investment increased growth for Jetboil and Old Town, enhancing leadership positions and channel performance.
- Diving Segment Innovation -- SCUBAPRO's Hydros Pro 2, shipped beginning December, delivered positive sales momentum, building on a legacy of innovation in buoyancy control devices.
- E-Commerce Channel -- Identified as the fastest-growing revenue channel, with stated intent to accelerate expansion and its status as a key contributor to overall growth rates.
- Cost Savings Initiatives -- Management reiterated cost efficiency and supply chain optimization as ongoing strategies, highlighting they remain a critical focus for margin protection.
- Tax Expense -- Approximate $2 million tax expense for the quarter, primarily due to U.S. deferred tax asset valuation allowance adjustment, and described as potentially variable in coming periods until profitability stabilizes.
Summary
The company reported major year over year financial improvement, including a sharp reduction in losses and increased gross margin. Brand-level innovation and digital sales execution drove segment growth, making e-commerce the company's fastest-accelerating sales channel. Management emphasized a continued commitment to product cost optimization, dividend continuity, and leveraging inventory reductions to support profitability momentum.
- Helen Johnson-Leipold stated, "trade was in a good position from an inventory standpoint to react to good sell-in," which may indicate normalized channel inventories heading into the primary selling season.
- Vice President and Chief Financial Officer David W. Johnson noted that most sales growth "was unit volume driven," clarifying demand rather than unit pricing as the main revenue driver.
- Helen Johnson-Leipold confirmed, "it's the fastest growing channel we have," marking it as a core strategic pillar moving forward.
- David W. Johnson described the near-term effective tax rate as "kind of wonky going forward until we can kind of stabilize our profits," cautioning about quarterly volatility in reported tax expense.
Industry glossary
- Overhead absorption: Allocation of fixed production costs over a higher volume of goods, reducing per-unit cost and improving gross margin.
- Buoyancy control device: Equipment used by divers to establish and maintain neutral buoyancy underwater, essential for controlled diving activities.
Full Conference Call Transcript
Helen Johnson-Leipold: Good morning, everyone. I'll begin by sharing our start to fiscal 2026 as well as an update on the strategic priorities for our businesses. David will review the financial highlights, and then we'll be happy to take your questions. In 2026, we saw markets stabilize and solid reception to our new products. That combination helped drive double-digit growth in the quarter, which is encouraging given that this quarter is typically a slower period as we ramp up through the primary selling season. Additionally, the ongoing hard work we've been doing to improve our profitability has been showing results. Our operating loss through this first quarter was much improved versus the prior year quarter.
While there are still uncertainties in the broader environment, we're encouraged by how the fiscal year has started and feel good about the execution of our plans to accelerate the growth of our business and brands. Starting with Fishing, both our Minn Kota and Humminbird brands delivered solid performance in the quarter with the category benefiting from improved trade dynamics. Demand remains strong for Humminbird's Explorer series and Mega Live 2 fish finders, which launched last fiscal year, and we saw healthy demand across Minn Kota's full lineup of trolling motors. Turning next to camping and watercraft. This is an area where our investments in digital and e-commerce are really paying off.
David W. Johnson: Across Jetboil and Old Town, we've been focused on meeting consumers where they are, which is online, and making it easier for them to discover and purchase our products. These efforts helped drive growth in the quarter. Both Old Town and Jetboil remained strong leaders in their respective markets. Jetboil continues to see strong demand for its fast-boil cooking systems, which has exceeded our expectations. Finally, in diving, improved conditions across the global markets and our innovation helped drive an increase in sales for the quarter. We continue to see positive momentum for Scubapro's new Hydros Pro 2 product that we began shipping in December.
Hydros Pro 2 builds on the award-winning legacy of our original Hydros Pro, incorporating meaningful innovation of comfort, fit, and performance needed in the buoyancy control device. Digital engagement is becoming increasingly important in diving, as well, from educating on new technologies to supporting dealers with better digital tooling content. We see this as another opportunity to strengthen the connection between our products, our retail partners, and consumers. Overall, we are pleased with the start of fiscal 2026.
While it's still too early to predict how the rest of the fiscal year will unfold, our priorities remain clear across all our businesses: maintaining a strong and robust innovation pipeline, building a growing momentum in digital and e-commerce, and continuing to improve product costs and operating efficiency with our cost savings. These are the right drivers to position Johnson Outdoors for sustainable growth and long-term success. Now I'll turn the call over to David for more details on financials.
David W. Johnson: Thank you, Helen. Good morning, everyone. Loss before income taxes for the first quarter was $1.3 million compared to a pre-tax loss of $18.9 million in the previous year quarter. The improvement is driven mostly by revenue growth and improving margins. Gross margin for the first quarter improved to 36.6%, up 6.7 points from the prior year. Overhead absorption from higher volumes was the main driver of the improvement in gross margin. Additionally, price increases and our ongoing progress on cost savings initiatives helped offset increases in material costs. Operating expenses increased $2.1 million from the prior year first quarter, due primarily to increased sales volume-related expenses, partially offset by decreased warranty expense.
Tax expense for the quarter was about $2 million, driven mainly by an adjustment related to our US valuation allowance on deferred tax assets. We continue to make good progress on our inventory levels. Inventory balance at the end of the first quarter was $103.9 million, down about $17.7 million from the previous year quarter. I want to highlight that our balance sheet remains debt-free, and we continue to pay a meaningful dividend to shareholders, with the Board approving our most recent dividend announced in December. We remain confident in our ability and plans to create long-term value for shareholders. Now I'll turn the call over to the operator for the Q&A session.
Operator: Thank you. At this time, we'll conduct a question and answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Please stand by while we compile the Q&A roster. And our first question comes from the line of Anthony Chester Lebiedzinski of Sidoti. Your line is now open.
Anthony Chester Lebiedzinski: Thank you, and good morning, everyone. Certainly a great start to the fiscal year, and thanks for taking the questions. So first, just a general kind of question in terms of pricing versus unit volumes. I don't need specific numbers, but just kind of, you know, maybe if you can just talk about what you saw as far as pricing versus unit volumes. That'd be a good start. Thanks.
David W. Johnson: Well, yeah, most of the increase in the quarter was unit volume driven, but we did take pricing across the businesses to react to the cost increases we had. So, but I would say most of the increase we're seeing is unit volume related.
Anthony Chester Lebiedzinski: That's encouraging. Yeah. Thanks, David. So you guys have for years focused strongly on innovation. Can you share broadly as far as what, as far as your sales are concerned, what's coming from new product versus a few years ago? Has there been a meaningful change in terms of the new product component of your sales?
Helen Johnson-Leipold: You know, I mean, innovation has always been critical for us, and we have been focusing on improving our success rate. So competition is strong, and our main way of maintaining leadership is innovation. So I would say we continue to make it stronger. And I don't know about the David, you can comment on the percent of volume, but it truly is the driver of growth.
David W. Johnson: Absolutely. And we've seen improvement in our new product success over the last couple of years. I think, you know, during the COVID cycle, you know, that may have come down a little bit, but we're seeing improvement in that area.
Anthony Chester Lebiedzinski: Gotcha. Thanks. And then you also talked about the growth in the e-commerce channel. Can you share with us what percentage of your revenue is now related to e-commerce? And do you guys have a goal in mind as far as what you want to get to in the next few years?
Helen Johnson-Leipold: Well, all you know, what we can say is that it's the fastest growing channel we have. And it's definitely expansive growth for us. Our goal is to continue to grow that at a faster pace than across our businesses. It's a key contributor to growth year on year.
Anthony Chester Lebiedzinski: Mhmm. Gotcha. Alright. And then so you've had a great start here to the fiscal year, strong sell-in to retailers in December. What is your sense now about the current trade inventory levels?
Helen Johnson-Leipold: Well, we were glad that they marked when we said stabilized, it's more that the trade was in a good position from an inventory standpoint to react to good sell-in. And we had a good sell-in during the first quarter, and so they are in a good position. Hopefully, we get the consumer takeaway as the season begins. So I think that the trade is in a healthy position right now.
Anthony Chester Lebiedzinski: Okay. That's good to hear. And you've done a lot with your cost savings efforts, and it's clearly evident in the gross margin improvement. I know there were some fixed cost absorption components to that as well. But as it relates to the cost savings initiatives, should we expect more to come on that program as we look forward to the rest of the fiscal year?
David W. Johnson: Yeah. It's a key strategy for us going forward, especially in these volatile times with the supply chain. So it'll be critical for us to continue to work on optimizing product costs, being as efficient as possible. We've got a whole slew of initiatives that we're working on to make that happen.
Anthony Chester Lebiedzinski: Mhmm. Okay. And then in terms of the warranty expense, you know, how significant was that as far as the adjustment to the OpEx?
David W. Johnson: Yes. I mean, it was probably less than a point of the operating expense percentage going down. So, but it did come down in the quarter. So we wanted to point that out.
Anthony Chester Lebiedzinski: Gotcha. Okay. That makes sense. Okay. And lastly for me, I mean, so, David, you did touch on the tax expense, which we were not expecting for the quarter. Going forward, what's the, you know, where should we expect the tax rate to fall for the balance of the fiscal year?
David W. Johnson: Yeah. I mean, the challenge for us is, you know, just the profits in the geographies in which we serve. So we've got, you know, the valuation allowance in the US. And as we make money in the US, you know, that it that won't we won't have tax benefit or expense on that because it's all reserved for us. So the tax rate will be kind of wonky going forward until we can kind of stabilize our profits.
Anthony Chester Lebiedzinski: Mhmm. Okay. Gotcha. Alright. Well, thank you very much, and best of luck.
Operator: Thank you. Thanks, Anthony. Thank you. I'm showing no further questions at this time. I'll now turn it back to Helen Johnson-Leipold for closing remarks.
Helen Johnson-Leipold: Okay. Just want to thank everybody for joining us, and have a great day.
Operator: Thank you for your participation in today's conference. This concludes the program. You may now disconnect.