Reflecting On Leisure Products Stocks’ Q3 Earnings: MasterCraft (NASDAQ:MCFT)
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how leisure products stocks fared in Q3, starting with MasterCraft (NASDAQ:MCFT).
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.
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 7.3% since the latest earnings results.
MasterCraft (NASDAQ:MCFT)
Started by a waterskiing instructor, MasterCraft (NASDAQ:MCFT) specializes in designing, manufacturing, and selling sport boats.
MasterCraft reported revenues of $65.36 million, down 30.7% year on year. This print exceeded analysts’ expectations by 6.7%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EPS and EBITDA estimates.
Brad Nelson, Chief Executive Officer, commented, “Our business executed well during the first quarter as we delivered results above expectations despite facing a backdrop of continued economic and industry headwinds. Our strong quarter was led by significant progress rebalancing dealer inventories and sets a strong foundation for the rest of the fiscal year. With the summer selling season now complete, we are focused on shipping our enhanced product ahead of the boat show season, while we continue to carefully manage dealer health.”
MasterCraft Total Revenue
Interestingly, the stock is up 1.9% since reporting and currently trades at $17.96.
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.
American Outdoor Brands reported revenues of $60.23 million, up 4% year on year, outperforming analysts’ expectations by 13.1%. The business had an incredible quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
American Outdoor Brands Total Revenue
American Outdoor Brands delivered the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 46.8% since reporting. It currently trades at $16.
Founded in 1949, Ruger (NYSE:RGR) is an American manufacturer of firearms for the commercial sporting market.
Ruger reported revenues of $122.3 million, up 1.2% year on year, falling short of analysts’ expectations by 10.8%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
Ruger delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 12.4% since the results and currently trades at $35.71.
Started through a Kickstarter campaign, Solo Brands (NYSE:DTC) is a provider of outdoor and recreational products.
Solo Brands reported revenues of $94.14 million, down 14.7% year on year. This number surpassed analysts’ expectations by 1.7%. Zooming out, it was a mixed quarter as it also recorded an impressive beat of analysts’ adjusted operating income estimates but a significant miss of analysts’ EPS estimates.
The stock is down 27.1% since reporting and currently trades at $1.06.
Formerly known as Brunswick-Balke-Collender Company, Brunswick (NYSE: BC) is a designer and manufacturer of recreational marine products, including boats, engines, and marine parts.
Brunswick reported revenues of $1.27 billion, down 20.1% year on year. This number came in 1.3% below analysts' expectations. It was a softer quarter as it also recorded full-year EPS guidance missing analysts’ expectations.
The stock is down 18.2% since reporting and currently trades at $63.01.
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. The path forward is marked by uncertainty.
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