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Why Johnson Outdoors Inc. Climbed 18% in May

By Jeremy Bowman – Jun 3, 2017 at 12:15PM

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Shares of the outdoor products company soared after a blowout earnings report.

What happened

Shares of Johnson Outdoors (JOUT 3.54%) were flying higher last month after the maker of boating, camping, and other outdoor equipment posted a strong first-quarter earnings report. According to data from S&P Global Market Intelligence, the stock finished the month up 18%.

As the chart below shows, the bulk of the gains came on May 5 in response to the earnings report.

JOUT Chart

Data by YCharts.

The stock got a further bump a couple of days later when Imperial Capital raised its price target to $49 from $44 per share.

So what 

The maker of Old Town canoes blew past estimates on both its top and bottom lines. Revenue in the quarter increased 11.6% to $149.8 million, well ahead of expectations of $137.6 million. Earnings per share, meanwhile, jumped 50% to $1.39, crushing the analyst consensus at $0.92 per share.

In the Fishing segment, which makes up more than two thirds of total sales, the company saw 16% growth, and also reversed an operating loss from a year ago in Diving.

CEO Helen Johnson-Leopold said, "Excitement in the market for Johnson Outdoors' innovative new product line-up is giving us a great start to the year."

A fisherman casts from his boat

Image source: Johnson Outdoors.

Now what

Management did not provide guidance in the press release, but analysts lifted their full-year EPS estimates from $2.40 to $2.87 on the report. Outdoor-products companies have had mixed results of late, but the momentum in the Fishing division looks promising. Management touted the Minn Kota outboard motor brand and Humminbird digital fish finders in particular. 

With the stock still trading at a modest valuation, there's plenty of room for it to keep moving higher.

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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