Leisure Products Stocks Q3 Earnings: American Outdoor Brands (NASDAQ:AOUT) Firing on All Cylinders
Introduction
The third quarter earnings season for leisure products stocks has come to an end, and the results are in. Among the 14 companies tracked, only one stood out as a clear winner: American Outdoor Brands (NASDAQ:AOUT). With revenues up 4% year-on-year, exceeding analysts’ expectations by 13.1%, it’s no wonder the stock is up 37.3% since reporting.
The Leisure Products Sector
Leisure products cover a wide range of goods in the consumer discretionary sector. Maintaining a strong brand is key to success, and those who differentiate themselves will enjoy customer loyalty and pricing power while those who don’t may find themselves in precarious positions due to the non-essential nature of their offerings.
Q3 Performance
The 14 leisure products stocks we track reported a slower Q3. As a group, revenues beat analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was 1.1% below. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.1% since the latest earnings results.
Best Q3: American Outdoor Brands (NASDAQ:AOUT)
Spun off from Smith and Wesson in 2020, American Outdoor Brands (NASDAQ:AOUT) is an outdoor and recreational products company that offers firearms and firearm accessories. With a strong brand reputation and innovative product offerings, it’s no surprise the company delivered impressive results.
American Outdoor Brands Q3 Results
- Revenues: $60.23 million, up 4% year-on-year
- EPS estimate beat: 13.1%
- EBITDA estimate beat: 15.6%
The company’s solid performance can be attributed to its focus on product innovation and customer satisfaction. As a result, American Outdoor Brands scored the highest full-year guidance raise of the whole group.
Malibu Boats (NASDAQ:MBUU)
Founded in California in 1982, Malibu Boats (NASDAQ:MBUU) is a manufacturer of high-performance sports boats and luxury watercrafts. Despite a disappointing revenue print, the company still managed to exceed analysts’ expectations by 2.6%.
Malibu Boats Q3 Results
- Revenues: $171.6 million, down 32.9% year-on-year
- EPS estimate beat: 11.1%
- EBITDA estimate beat: 12.5%
Although Malibu Boats had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 12.1% since reporting.
Weakest Q3: Clarus (NASDAQ:CLAR)
Initially a financial services business, Clarus (NASDAQ:CLAR) designs, manufactures, and distributes outdoor equipment and lifestyle products. Unfortunately, the company failed to impress with its Q3 results.
Clarus Q3 Results
- Revenues: $67.12 million, down 17.4% year-on-year
- EPS estimate miss: 8.1%
- EBITDA estimate beat: 5.6%
The disappointing quarter can be attributed to the company’s failure to deliver strong revenue growth and its full-year guidance missing analysts’ expectations.
YETI (NYSE:YETI)
Founded by two brothers from Texas, YETI (NYSE:YETI) specializes in outdoor products such as coolers, drinkware, and camping equipment. The company’s Q3 results were impressive, with revenues up 14% year-on-year.
YETI Q3 Results
- Revenues: $1.02 billion, up 14% year-on-year
- EPS estimate beat: 10.5%
- EBITDA estimate beat: 12.2%
The company’s strong performance can be attributed to its focus on product innovation and customer satisfaction.
Latham (NASDAQ:LTHM)
Headquartered in Florida, Latham (NASDAQ:LTHM) is a leading manufacturer of outdoor recreational products such as boats, trailers, and accessories. Despite a disappointing revenue print, the company still managed to exceed analysts’ expectations by 3.6%.
Latham Q3 Results
- Revenues: $142.9 million, down 11% year-on-year
- EPS estimate beat: 4.5%
- EBITDA estimate beat: 6.1%
The company’s solid performance can be attributed to its focus on product innovation and customer satisfaction.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing.
The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over.
Conclusion
The Q3 earnings season for leisure products stocks has come to an end, and American Outdoor Brands (NASDAQ:AOUT) stands out as a clear winner. With revenues up 4% year-on-year, exceeding analysts’ expectations by 13.1%, it’s no wonder the stock is up 37.3% since reporting.
As we look ahead to 2025, investors should keep an eye on the leisure products sector, which has shown resilience despite economic uncertainty. Companies with strong brands and innovative product offerings will continue to thrive in this market.
Recommendations
- American Outdoor Brands (NASDAQ:AOUT)
- YETI (NYSE:YETI)
These companies have demonstrated impressive results and a strong focus on product innovation and customer satisfaction, making them great additions to any portfolio.
Investor Resources
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