American Outdoor Brands: A Weak Outlook Shoots Down A Good Quarter

Even after reporting strong fourth-quarter earnings, Jefferies analyst Greg Konrad does not like American Outdoor Brands AOBC's future outlook. The analyst has a Hold rating on the stock with a $23.94 price target.

A Look Back At Q4

• Revenue: $229.22 million (up 3.7 percent year over year).
• Accounts Receivable: $108.4 million ($72.9 million in Q3).
• Adjusted EPS: $0.07–$0.12 versus $0.31 estimate.
• Sales: $140 million–$150 million versus $177.86 million estimate.

“Growth was led by Outdoor Products & Accessories, partially offset by a 7% decline in Firearms sales,” Konrad said (see Konrad's track record). “Despite solid Q4 results, challenges still remain. Management believes rebate programs in the fourth quarter pulled forward some demand from FY18. The combination of lower consumer demand, wholesaler destocking and promotional activity should weigh on first half FY18 volumes.”

Additional earnings metrics are available on Benzinga Pro.

It's Not All Negative

While Konrad sees American Outdoor Brands targeting a difficult market, “AOBC's well-branded products and new product innovations should take market share.”

“The company's scale and outsourced manufacturing model allows for flexibility to stimulate demand through promotional activity, while meeting internal margin targets.”

American Outdoor Brands was trading down over 6 percent at $22.36, during Friday’s trading session.

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