Vista Outdoor Inc. announced earlier this month that it will transform its strategic business plan to allow the company to focus resources on pursuing growth in its core product categories and to refocus on ammunition sales.
Brands under the Vista Outdoor umbrella include Bell, Giro, Camelbak, Bushnell and their ammunition brands and more.
According to Bicycle Retailer, “Vista’s firearms and ammunition sales had already been soft for several quarters when the company found itself in the spotlight following the Parkland High School shooting in February. On March 1, REI, MEC and some independent retailers said they would stop ordering Vista products because of Vista’s lack of response following the shooting. Although REI and MEC don’t sell firearms, they sold Bell, Giro, Blackburn and other Vista Outdoor outdoor cooking and water sports brands.”
CEO Chris Metz said, “As we look at the rest of it, there’s been some puts and takes: So we’ve had some small independent dealers that sided with the REI side and we’ve had some independent dealers, frankly, that stepped up and said, ‘We want to take advantage of this market opportunity and replace that volume.’ In total it’s built into our guidance and expectations, and fortunately we have been on this path of strategically determining where we wanted to guide the company way before any of the noise came about eight weeks ago.”
In conducting the strategic review, Vista Outdoor management defined several criteria to evaluate whether individual product categories are part of the company’s core vision. Vista Outdoor evaluated brands within its current portfolio based on their ability to do the following:
• Serve the company’s target consumer – the outdoor enthusiast
• Create cross-selling and other similar synergy opportunities
• Achieve market leading positions and leadership economics
• Demonstrate omni-channel distribution capabilities
As a result of this evaluation, Vista Outdoor will focus on achieving growth through its market-leading brands in ammunition, hunting and shooting accessories, hydration bottles and packs and outdoor cooking products.
“Our review identified product categories that are core to the company’s long-term business strategy,” Metz said. “We believe future investment should focus on categories where Vista Outdoor can achieve sustainable growth, maximize operational efficiencies, deliver leadership economics, and drive shareholder value.”
The company plans to explore strategic options for assets that fall outside of these product categories, including its remaining sports protection brands (Bell, Giro and Blackburn), Jimmy Styks paddle boards and Savage and Stevens firearms.
Vista Outdoor expects that the execution of this process will significantly reduce the company’s leverage, improve financial flexibility and the efficiency of its capital structure, and provide additional resources to reinvest in core product categories, both organically and through acquisition.
At the end of the fiscal year, sales were $2.3 billion, down nine percent from the prior year. The decline was caused by lower volume in shooting sports across all ammunition categories, lower pricing across the portfolio and lower firearms sales as a result of decreased demand impacting the shooting sports industry.
Link: Vista Outdoor