JOUT JOHNSON OUTDOORS INC
Sector financial performance:
This company, which primarily manufactures and markets marine recreation electronics products used for fishing on boat and other products for diving, hiking and camping, has been grouped into marine electronics- fishing sector in sport goods industry.
It seems that the demand for fishing (on board) and diving electronics products has been strong and increasing in the past several years. However, it seems that the demand for products of watercraft and camping has been weak and may be declining.
The typical gross margin is about 44% (including depreciation), SG&A is about 29%, and operating margin is about 11% in 2018. The typical enterprise cash flow/EBI ratio is 37.
It seems that the demand for fishing products (trolling motor mainly) of this company has been strong and increasing in the past several years primarily due to new product’s performance. However, it seems that the demand for other products of this company including product in watercraft and camping has been weak and may be declining.
The first six months of fiscal 2018 compared with the same period of 2017 (ended March 31 2018)
Net revenue increased 16% primarily due to increase in fishing products offset by decrease in watercraft products.
Fiscal 2017 compared with fiscal 2016
Net revenue increased 13% primarily due to increase of 19% in fishing products offset by decrease in watercraft and camping products.
Fiscal 2016 compared with fiscal 2015
Net revenue increased 1% primarily due to increase of 5% in fishing products offset by decrease in diving and camping products.
Its gross margin (including depreciation) was improved by about 400 basis points since 2015(to about 44%) primarily due to sales’ shifting to new trolling motor with higher price. Due to additional improvement in its SG&A as percentage of sales (down to 29%), we see an improved operating margin of about 11% in 2018.
This company is having an enterprise price/cash flow ratio of 23. We think that its stock is being relatively fairly valued compared with other sport goods company -Callaway Golf Company.
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