Escalade profits dip as consumer demand drops
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The latest earnings report from Evansville-based Escalade Inc. (Nasdaq: ESCA) reveals softening consumer demand for some of the company’s sporting goods. The recreational equipment maker announced a drop in both full-year and fourth quarter profits. Full-year net income came in at $18 million, compared to $24.4 million the previous fiscal year.
The company also reported fourth quarter net income of $2.7 million compared to $4.9 million during the same period a year ago.
Escalade CEO Walter Glazer says sales declined due to a drop in consumer demand for outdoors gear, and excess inventories in the retail channel.
“Fourth quarter sales declined year-over-year due to softness in most outdoor categories, including archery, partially offset by continued strength in pickleball, table tennis, indoor games and billiards,” said Glazer. “While inventory in the system remained elevated and consumer demand softened into year-end, we maintained our price discipline, underscoring the resiliency of our brands and the loyalty of our customers.”
Glazer says he expect conditions in the first half of 2023 to be challenging as the company works through high-cost inventory and manage continued excess inventory levels. He says retailers have a cautionary economic outlook.
Due to the challenging economic environment, the company decided to close manufacturing facilities in Mexico.
“We’ve stayed focused on prudent capital allocation, while further reducing controllable expenses and improving our asset utilization,” said Glazer.
The company also announced it has transitioned to a conventional 12-month reporting calendar. Click here to access the full report.