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Johnson Outdoors: Heightened Demand For Recreational Fishing Boosts Revenues

Mar. 10, 2021 12:12 AM ETJohnson Outdoors Inc. (JOUT)3 Comments
Discount Fountain profile picture
Discount Fountain


  • Johnson Outdoors has seen a strong rise in net sales due to solid growth across its Fishing segment.
  • Additionally, the company's liquidity position remains particularly impressive during COVID-19.
  • I continue to see broad-based upside for the stock going forward.

Investment Thesis

Johnson Outdoors (NASDAQ:JOUT) is a financially strong company which has seen strong growth in revenue during COVID-19. Assuming earnings growth moderates to 10% per year going forward, the stock is still forecasted to have upside of 8% per year for the next five years. On this basis, I continue to see further upside for the stock going forward.

At a time when many stocks have been taking a hit due to the COVID-19 pandemic, Johnson Outdoors has not been one of them, with the stock price up sharply over the past year:

Source: investing.com

When looking at mobility across the United States for parks and outdoor spaces, we can see that mobility in the summer was much higher than the baseline even with COVID-19 continuing to be a concern:

Source: Our World in Data (Google Mobility Trends)

Recent Performance

With many indoor facilitates having closed in accordance with health guidelines - outdoor activities have made a resurgence in popularity and this is being reflected in higher demand for outdoor gear and equipment.

For instance, even with demand for outdoor activities moderating in the winter months, Johnson Outdoors still saw a strong increase in net sales for Q1 2021 compared to that of the previous year:

Source: Johnson Outdoors Q1 2021 Financial Results

The fishing segment proved particularly strong, with net sales up by 28 percent from the same period last year. While sales across the diving segment saw a decline due to pandemic-related restrictions, the impact was minor in the context of overall growth in net sales.

Source: Johnson Outdoors Q1 2021 Financial Results

Aside from the growth in revenue, the company's balance sheet is also particularly impressive. For instance, we see that Johnson Outdoors managed to significantly grow cash and cash equivalents by 42%, while also increasing inventories by over 10% to

This article was written by

Discount Fountain profile picture
I am an independent investor with an interest in analyzing stocks across the consumer, finance, telecommunication, and travel sectors. As a data scientist, I also have a great interest in using data tools to better understand a company's financial position.Some examples include:- Analysing total room revenue across brands for Hyatt Hotels using data visualisation: https://seekingalpha.com/article/4632039-hyatt-hotels-stock-hyatt-regency-and-china-revpar-growth-impressive- Building a Monte Carlo simulation in Python to analyze loss ratios for Zurich Insurance Group (ZURVY): https://seekingalpha.com/article/4605533-zurich-insurance-group-premium-growth-low-loss-ratio-encouraging- Calculating seasonality of customer lifetime value (LTV) for AT&T: https://seekingalpha.com/article/4634204-att-stock-growth-customer-lifetime-value-necessary-upsideDisclaimer: All of the author's articles are written on an "as is" basis and without warranty, with no guarantee of accuracy or completeness. They represent the author's opinion only and in no way constitute professional investment advice. It is the responsibility of the reader to conduct their due diligence and seek investment advice from a licensed professional before making any investment decisions. The author disclaims all liability for any actions taken based on the information contained in any articles published.

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Comments (3)

Thanks for the well-reasoned analysis of Johnson Outdoors, which isn't well known and is one of my favorite companies. I first bought it many years ago when I learned that it made the Eureka tent I own and is publicly held, even though the Johnson family owns most of it. The Johnsons once tried to take it private at about $20, but minority shareholders, including me, successfully objected. How did you happen to learn about it and write about it?
Gtoz profile picture
@trailrunnr I still have my Eureka backpacking tent that I bought around 1976-77. There were no 'eggrolls' back then, at least nothing light weight enough for my backpacking criteria. So it was on the hard ground with my wife. The tent was advanced for its time, with ripstop nylon, breathable upper and a fly, a vestibule, and tent poles that were sectionalized with stretch cord within. That was true camping, a tiny alcohol stove, freeze dried food, packing in wine in a plastic bottle and a few beers to put in a cold mountain stream upon campsite setup in a remote area. And climbing to the peaks which were always 'just a little bit further', a very contentious point with my wife. But she persevered.
Investor Oliver profile picture
@trailrunnr Do you perhaps know why did the shareholders object? And how likely do you think it is that they will try to take it private again?
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