American Outdoor Brands’ FY21 Outlook Tops Estimates After 3Q Beat; Shares Pop 11%


American Outdoor Brands provided upbeat guidance for the fiscal year 2021 after results topped consensus estimates in fiscal 3Q. Shares of the products and accessories provider for rugged outdoor enthusiasts spiked 10.9% in Wednesday’s extended trading session after closing 3% higher on the day.

American Outdoor Brands’ (AOUT) 3Q revenues increased 90.7% year-over-year to $82.6 million and exceeded the consensus estimates of $59.02 million. The outstanding performance was driven by a 129% rise in e-commerce sales and a 68.5% increase in traditional sales.

Adjusted earnings more than tripled on a year-over-year basis to $0.82 per share and beat the Street estimates of $0.36 per share by a wide margin. The quarterly gross margin was 45.2%, up from 44.1%.

American Outdoor Brands CEO Brian Murphy said, “We believe that our ‘Dock & Unlock’ strategy, designed to provide entry into new and larger addressable markets, continues to produce results as our brands progress along their transition from ‘Niche to Known’.”

For the fiscal year 2021, revenue is expected to land between $268 million and $272 million, versus the consensus estimates of $244.93 million. Moreover, the company’s non-GAAP earnings guidance range of $2.08-$2.15 per share came in ahead of analysts’ expectations of $1.68. (See American Outdoor Brands stock analysis on TipRanks)

Following the 3Q results, B.Riley Financial analyst Eric Wold increased the stock’s price target to $34 (46.4% upside potential) from $32 and reiterated a Buy rating.

Wold believes “the significant sales upside in 3Q21 is a solid indicator of continued demand after the pandemic spike as opposed to competitors that may be solely restocking prior inventory depletion.”

Furthermore, the analyst expects “the jump in rugged outdoor participation last year will drive demand tailwinds in FY22/FY23 and beyond.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 2 Buys. The average analyst price target of $28 implies 20.6% upside potential to current levels. Shares have jumped 39% so far this year.

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