Vista Outdoor 3Q Earnings Top Street Estimates

Vista Outdoor’s fiscal third-quarter earnings and revenues topped analysts’ expectations. Shares of the sporting goods manufacturer rose less than 1% in Thursday’s pre-market trading session.

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Vista Outdoor (VSTO) reported 3Q earnings per share of $1.03 that came in well ahead of analysts’ estimates of $0.65. During the reported quarter, revenue jumped 35% year-on-year to $575 million, beating the Street consensus of $520.1 million.

The company’s shooting sports business segment saw sales rise by 41% year-on-year to $402 million while the outdoor sports business segment generated sales of $173 million, up by 24% year-on-year.

Vista Outdoor CEO Chris Metz said, “Strong outdoor participation trends that began in the early days of COVID lockdowns have continued into calendar 2021 and do not appear to be slowing down. Our integration of the Remington brand is ahead of schedule and delivered better than expected performance in the quarter.”

Furthermore, Metz said, “This week we successfully completed a tuck-in acquisition of Hevi-Shot Ammunition, which will immediately add a high-end offering, specialized lead-free ammunition capabilities and another iconic brand to our ammunition portfolio.”

In the fiscal fourth quarter, the company expects sales to be in the range of $510 million to $530 million and EPS to be between $0.55 to $0.65. (See Vista Outdoor stock analysis on TipRanks )

Late last month, B.Riley Financial analyst Eric Wold raised the price target from $33 to $39 and reiterated a Buy rating on the stock. Wold said in a research note, “…we continue to see an upside bias to our/consensus estimates on underlying consumer demand strength and tight channel inventories for both operating segments.”

“With our expectation that the improved participation numbers for both outdoor products and shooting sports will represent an incremental tailwind for VSTO in the coming years beyond the impressive production visibility created by depleted channel inventory levels, we continue to see an attractive set-up for baseline growth that will be complemented by the Remington acquisition and other tuck-in acquisitions that the vastly-improved balance sheet can now support,” Wold added.

The rest of the Street is bullish about the stock with a Strong Buy consensus rating. That’s based on 8 unanimous Buy ratings. The average analyst price target of $34.63 implies about 10.3% upside potential to current levels.