Vista Outdoor May Sell Off Savage Arms and Stevens
Vista Outdoor Announces Strategic Business Transformation Plan
Big news. Vista Outdoor Inc. (NYSE: VSTO) may be selling off gun-makers Savage and Stevens, declaring it will “explore strategic options” for those brands. However, Vista Outdoor will retain its businesses that produce ammunition and reloading components: Alliant Powder, CCI, Federal Premium, and Speer. The sell-off of Savage and Stevens is not a sure thing yet, but Vista’s new CEO Chris Metz has been looking hard at the “bottom line” and he says that the gun-making brands have not been as profitable as expected. This is not just an exit from gun-making. Vista Outdoors executives have analyzed the company’s full portfolio of brands, and decision-makers have targeted other brands for sell-off. READ Vista Outdoor News Release.
The Wall Street Journal reported: “The company [Vista Outdoor, VSTO, -13.07% on 5/1/18] said Tuesday it would pare its brands to focus on business lines including ammunition and shooting accessories, water bottles and packs and outdoor cooking ware. It will explore the sale of several brands including Bell bike helmets, Giro snow goggles, Blackburn handlebar tape, Jimmy Styks paddle boards, and Savage and Stevens firearms[.]”
Notably, Vista Outdoor remains fully committed to the ammunition and components businesses. In an official news release, CEO Metz stated: “Vista Outdoor is excited about the potential of each of our core businesses, particularly ammunition, which is our largest core business. An increased focus on our heritage ammunition business will manifest itself in more innovative and breakthrough new products introduced over the next few years. We also anticipate that by prioritizing this business, we will be able to invest more capital to further enhance and expand our global leadership position.” Metz denied that the sell-of of Savage and Stevens was a response to a boycott by the REI outdoor retail chain. The CEO said that REI represents less than 1% of the company’s total sales.
CEO Metz acknowleged that revenues were down substantially for the past fiscal year (ending 3/31/18), and reduced gun sales were one reason: “Sales were $2.3 billion, down 9% from the prior year. The decline was caused by lower volume in Shooting Sports across all ammunition categories, lower pricing across the portfolio, and lower firearms sales as a result of decreased demand impacting the shooting sports industry. Additionally, Outdoor Products declines were caused by market conditions affecting shooting-related categories, including hunting and shooting accessories, optics, and tactical products.”
Vista Outdoor currently has a large portfolio of brands, including guns, gear, eyewear, ammunition, camping equipment, and much more. Top brands for guns and shooting, after Savage and Stevens, are: Alliant Powder, American Eagle, Blazer Ammunition, Bushnell, CCI, Federal Premium, RCBS, and Speer.
