Johnson Outdoors NASDAQ: JOUT reported higher third-quarter sales and operating income, supported by demand in its fishing and diving businesses and approximately $15 million in tariff refunds that boosted profitability.
Chairman and Chief Executive Officer Helen Johnson-Leipold said total company sales increased 5% from the prior-year quarter, while operating income rose by about $11 million to $18.3 million. For the first nine months of fiscal 2026, net sales increased 15% year over year, with gross margin and operating income also improving.
“The strength of our market-leading brands helped us deliver solid third-quarter results,” Johnson-Leipold said, citing the company’s strategic priorities of innovation leadership, digital and e-commerce expansion, and operational efficiencies.
Fishing and Diving Support Quarterly Growth
Johnson-Leipold said the fishing business benefited from continued healthy demand across Minn Kota’s trolling-motor lineup. She said the company remains focused on investing in innovation and technology intended to enhance the experience for anglers.
In diving, stronger sales of regulators and buoyancy compensators drove a solid increase in third-quarter revenue. The company said digital engagement is playing a growing role in connecting the SCUBAPRO brand with consumers and retail partners. Johnson Outdoors is working to improve brand visibility, consumer engagement and support for retailers globally, according to Johnson-Leipold.
The camping and watercraft business faced a more difficult quarter because of weaker market conditions. Johnson-Leipold said Jetboil remains a leader in camp cooking and that the company sees opportunities to strengthen and expand the brand. She added that Old Town’s portfolio of watercraft continues to resonate with consumers despite the challenging environment.
Asked about the progression of demand through the quarter and into July, Johnson-Leipold said results varied across the company’s businesses. She declined to provide forward-looking statements but said the company feels positive about the momentum from its innovation plans while recognizing that market conditions remain complex.
Tariff Refunds Lift Gross Margin
Chief Financial Officer Asad Rahman, who joined Johnson Outdoors on June 30, said third-quarter gross margin improved to 45.3%, up 7.7 percentage points from the prior-year quarter. The approximately $15 million in tariff refunds contributed to that improvement.
Excluding the tariff-refund benefit, gross margin would have been modestly lower than the prior-year quarter because of higher raw-material costs, Rahman said. The company does not anticipate additional meaningful tariff refunds and is monitoring the evolving tariff environment for possible cost impacts.
For the first nine months of the fiscal year, gross margin was 40.6%, up 5.8 percentage points year over year. Rahman said tariff refunds, pricing actions, improved overhead absorption and cost-saving measures more than offset higher material costs during the year-to-date period.
- Third-quarter profit before income taxes was $23.3 million, compared with $10.5 million a year earlier.
- Year-to-date profit before income taxes was $32.2 million, compared with a $4.3 million loss in the prior-year period.
- Inventory totaled $188.3 million at the end of the third quarter, up approximately $24.5 million from the prior-year quarter, as the company increased inventory to support sales demand.
On pricing, management said it implemented strategic price actions where appropriate, while considering consumer demand dynamics. Rahman said pricing and cost savings remain favorable factors for margins, while rising raw-material expenses—particularly dynamic electronic component costs—remain a headwind.
Expenses Rise With Volume and Incentive Compensation
Operating expenses increased $7 million from the prior-year third quarter. Rahman attributed roughly half of that increase to variable compensation costs, with the remainder tied to higher sales-volume-related costs and other expenses.
“We continue to manage our expenses prudently while investing in key priorities that are the right things to set us up for long-term success,” Rahman said.
Rahman also said the company’s strategic cost-savings program continues to provide meaningful benefits. Johnson Outdoors ended the quarter debt-free and continues to pay a dividend, with its most recent dividend approved by the board and announced in May.
Tax Expense Expected at $5 Million to $6 Million for Full Year
Responding to a question about tax rates, Rahman said the company’s quarterly tax rate can fluctuate because of a valuation allowance on U.S. income. He said Johnson Outdoors expects full-year tax expense of approximately $5 million to $6 million.
Johnson-Leipold also noted that longtime Chief Financial Officer Dave Johnson is expected to retire later in the year. She thanked him for his years of service and contributions to the company while welcoming Rahman to the role.
About Johnson Outdoors (NASDAQ:JOUT)
Johnson Outdoors Inc is a diversified outdoor recreation company that develops, manufactures and markets a broad range of gear and equipment for marine and land-based activities. The company operates through two primary segments: the Marine Electronics & Boat Group and the Outdoor Products Group. Its marine offerings include electric motors and anchors under the Minn Kota® brand, fish-finding and sonar systems under the Humminbird® brand, and a lineup of recreational watercraft under the Old Town® and Ocean Kayak® names.
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