Johnson Outdoors Inc. (Johnson Outdoors (JOUT)), the company behind fishing gear, camping equipment, and diving gear, reported a solid second quarter on Friday that beat Wall Street expectations. But the good news came with a side of caution: costs are creeping up, and management is watching closely.
Net sales hit $194.5 million, up 16% from a year ago and ahead of the $185.1 million analysts were looking for. Earnings per share came in at 89 cents, just above the 87-cent consensus. Operating income more than doubled to $10.3 million from $4.9 million, and gross margin expanded to 38.8% from 35%, helped by better manufacturing absorption and ongoing cost-cutting efforts.
The company ended the quarter with $107.9 million in cash and short-term investments as of April 3, 2026. In February, Johnson Outdoors approved a quarterly cash dividend for shareholders of record as of April 16, with payment distributed on April 30.
Looking at the segments, fishing was the star: revenue jumped 18% from a year earlier, supported by improved market conditions, stronger competitive positioning, and pricing actions. Camping and Watercraft Recreation sales edged up 1%, driven by increased e-commerce activity. Diving revenue rose 9% as demand trends improved and online sales continued to grow.
But here's the catch. CFO David W. Johnson said in the release: "Our ongoing efforts to strategically manage costs helped boost margins in the second quarter. At the same time, we are seeing increased cost pressures, along with a modest increase in inventory as we prepare for the upcoming selling season." He added, "Despite uncertainties in the broader economic environment, we remain focused on our financial discipline and will continue to closely manage the business to balance near-term pressures with long-term value creation."
Investors seemed to focus on the cost pressures rather than the earnings beat. Johnson Outdoors shares were down 2.45% at $52.19 at the time of publication on Friday. The stock is trading near its 52-week high of $53.54, according to market data.
