Outlook suddenly turns sunny for Vista Outdoor

Vista Outdoor’s fortunes have shifted dramatically in recent months with help from the coronavirus pandemic and civil unrest that has taken root in a number of American cities.

The company made $40.5 million in the first quarter of its fiscal year, according to financial results released Thursday.

That profit followed four consecutive fiscal years of losses, ending in March of this year, for the ammunition maker and supplier of outdoor products, such as golf gear and Camelbak hydration packs.

Vista’s per-share stock price was $20.25 at the close of the stock market Thursday, compared with $5.80 per share a year ago.

When Vista executives shared the news about the loss for fiscal year 2020 in May, uncertainty existed in their industry.

A number of the stores that sold Vista merchandise were closed or operating with limited hours to help prevent the spread of the coronavirus.

A few weeks later, circumstances shifted and Vista benefited from the work its employees had been doing behind the scenes to position it to thrive when consumer demand rebounded, said Vista CEO Chris Metz in a conference call Thursday for stock market analysts.

“Continued uncertainty” drove sales in the shooting sports category that includes ammunition, he said. “We’re seeing a whole new refreshed desire for self-sufficiency and personal protection with our consumers.”

The reasons behind brisker ammunition purchases are different than those that drove heightened sales for ammo when Barack Obama was president, Metz said.

At that time, gun enthusiasts stockpiled ammunition, worried about new regulations that never materialized that would have limited their ability to obtain ammunition.

Now the number of gun owners is increasing and the demographic of those who acquire firearms is becoming more diverse, he said. Data from the National Shooting Sports Foundation indicate that 40 percent of firearms sales in 2020 have been to new buyers, he said.

At the same time, numbers from that group show the combined purchases of firearms by people of color and women increased 58 percent in the first six months of this year over the same time last year, he said.

Range memberships are growing, along with the number of new shooters taking classes about how to use their guns, Metz said.

Those trends, combined with working from home and less vacation travel, have increased participation in handgun, rifle and shotgun sports, he said.

“We are seeing stockpiling happening to a certain degree, but the (additional) free time has given people more opportunities to recreate,” Metz said.

Markets for Vista’s products in its outdoor segment that includes items such as bike helmets and Camp Chef stoves were strong, too, he said.

When stores reopened, they were flooded with people buying goods to exercise and entertain themselves in safe, socially distant ways outside, Metz said.

“We believe the structural change is not a three- or six-month blip in our country and lifestyles, but the beginning of a new norm and a way of life,” he said.

A number of strategies Vista has undertaken behind the scenes have enabled the company to sell to the growing market for its goods.

For example, when the pandemic forced the cancellation of large trade shows that have traditionally been places where the company received big orders, its sales team substituted virtual experiences to reach the audiences that would have been at the events, Metz said.

It’s created online content on topics that many new gun owners seek, such as safety and basic information about how to use their weapons, he said.

Vista has also become more efficient through approaches, such as analyzing its products and focusing on the ones with the best profit margins, Metz said.

Vista executives believe the strength they saw in the first quarter of their fiscal year will continue for many reasons, he said.

One of them is a five-year contract for as much as $112 million with the U.S. Department of Homeland Security from Speer Ammunition, part of the company headquartered in Lewiston.

Speer will provide the duty ammunition for customs and border patrol officers and will begin shipping as early as the last three months of this year.

“This contract is the largest single contract issued by federal law enforcement,” Metz said. “This win illustrates that we make the best pistol ammunition in the market.”

That revenue will be bolstered by consumers buying items for outdoor adventures, he said.

“The future is bright and we are excited about our (position) over the long term.”

Williams may be contacted at ewilliam@lmtribune.com or (208) 848-2261.