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Why Vista Outdoor Stock Is Up Today

By Lou Whiteman – Nov 4, 2021 at 3:59PM

Key Points

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The outdoor sports accessories company blew away earnings expectations.

What happened

Vista Outdoor (VSTO -0.62%) reported a blowout quarter and raised full-year guidance, sending shares up as much as 12% in Thursday trading.

So what

Vista, a maker of shooting sport and outdoor gear and products, reported fiscal second-quarter earnings of $2.41 per share on revenue of $778.46 million, easily topping analyst expectations for $1.80 per share in earnings on sales of $725 million.

Hiking equipment on the trail.

Image source: Getty Images.

The company reported strong results in both operating segments, but the shooting sports business is doing particularly well. Earnings were up 177% and sales were up 49% year over year, thanks to improved pricing and the scale advantages of higher volumes.

Outdoor products sales were up 9%, led by the company's CamelBak outdoor hydration line.

"Across our business, we are demonstrating that brand power, innovative products and omni-channel distribution are the keys to driving growth and profitability," CEO Chris Metz said in a statement. 

Now what

Vista Outdoor expects the momentum to continue through the rest of the fiscal year, forecasting full-year adjusted earnings of $7.70 to $8 per share on revenue of $2.9 billion to $2.95 billion. That implies a lot of upside to the $6.15 per share in earnings on revenue of $2.78 billion consensus, and would mark sales growth of more than 30% compared to the $2.2 billion reported in fiscal 2021.

Vista also expects to generate adjusted EBITDA margin of 24% to 24.5% for the full year.

It's been a period of transition for this company as it refocuses away from guns and toward accessories and outdoor equipment, but the plan appears to be coming into place nicely. Investors are excited, sending the shares to a new multiyear high.

Lou Whiteman has no position in any of the 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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