Vista Outdoor, Inc. is continuing to back away from its previously announced plans to sell off its Bell and Giro businesses.
Vista first announced a year ago that it would sell off the bike brands — including Bell, Giro, and Blackburn, but not CamelBak — as part of a brand portfolio realignment. Vista also said then that it would sell its Savage firearm business.
On May 9th CEO Chris Metz said the company had continued to evaluate the brands’ potential and current status.
“We came to the conclusion that those brands (Bell and Giro) can return to growth and display the leadership economics we expect from the brands in our portfolio,” he said. “However today with the current state of that business we don’t believe we’d get the offers we’d want to see, so we’re going to spend some time to improve the brands’ performance to get them to where they rightfully should be.”
In answer to an investor question, Metz gave some indication of the time frame.
“We came to clear conclusion as a team and as a board that we are much better off holding this asset and continuing to improve it for a period of time. That will be a multiyear period of time. We see that much upside in the business. At this point in time we’re excited about holding it; we think it’s the best thing to do for driving shareholder value.”
He also said the Bell/Giro business had recently had a leadership change and that now is a good opportunity to rebuild the brands. He was likely referring to the departure of Jen Harned, who was the general manager of Bell and Giro.
On Thursday the company announced that it recorded an 11% sales decline in its most recent fiscal year, which ended March 31.
The company said the sale of its eyewear brands Bollé, Cébé and Serengeti last year contributed to the revenue decline, but noted that the $154 million sale also lowered its debt significantly.
“We have taken significant cost out of our business, reduced corporate overhead, strengthened our leadership team and restructured our brand teams to allow them greater flexibility to respond to the needs of their consumers and deliver innovative products that will drive growth in the future — in short, we have rebuilt the foundation of our company,” said Metz. “While there is more work to be done, these actions were designed to sharpen our strategic focus and provide our brands with a platform to support growth and improved profitability for the future.”
For the fiscal year, sales were $2.06 billion. The company said the loss of eyewear sales revenue contributed, as did lower demand for some ammunition, hunting and shooting accessories, hydration, and in the Action Sports businesses in its Outdoor Products segment. The Action Sports businesses include the bike brands.
Gross profit for the year was $416 million, down 20% compared to the prior year. Adjusted gross profit was $432 million, compared to $524 million in the prior year.
For the next fiscal year, the company forecast sales in a range of $1.940 billion to $2.030 billion and earnings per share in a range of $0.28 to $0.38. The also expects EBITDA margins of approximately 7%.