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4. Vista Outdoor Inc. (NYSE:VSTO)

Year-to-Date Performance as of October 11: 49.10%

Forward Price-to-Earnings Ratio: 10.88

Number of Hedge Fund Holders: 36

Vista Outdoor Inc. (NYSE:VSTO) is a designer, manufacturer, and marketer of outdoor sports and recreation products, operating in two markets: shooting sports and outdoor products. It has over 40 labels and subsidiaries, manufacturing and distributing products for hunting, shooting, fishing, camping, and other outdoor activities. Some of its well-known brands include Federal Ammunition, Remington Arms, Savage Arms, and Bushnell Optics.

The company reported a revenue decline as it entered the first quarter of fiscal 2025, down by 7.09%, accounting for $644.18 million in quarterly revenue. The company’s earnings per share also declined by 6.5% to $1.01. The Kinetic Group generated $370 million in revenue, while Revelyst reported $274 million. The company faced challenges with supply chain disruptions, delayed product launches, and increased manufacturing costs.

However, the GEAR Up program at Revelyst has already saved up around $5 million this year, putting the company on track to achieve its target savings of $25-30 million for the fiscal year 2025. Additionally, its products continue to be recognized, as evidenced by a recent $3.6 million contract with the US military for its 7.62×51 Long Range ammunition.

On October 5, Revelyst entered into an agreement with Strategic Value Partners (SVP) to be acquired for $1.125 billion. The transaction is expected to close by January 2025, subject to certain conditions. SVP’s investment will provide Revelyst with additional resources and support to accelerate its growth and innovation. The partnership aims to leverage Revelyst’s strong market presence and expertise to expand its reach and profitability.

Vista Outdoor Inc. (NYSE:VSTO) remains laser-focused on driving growth and market share gains with category-defining brands and innovative offerings. Upcoming and continuing product launches further solidify its position as a leader in outdoor gear and technology.

ClearBridge Small Cap Value Strategy stated the following regarding Vista Outdoor Inc. (NYSE:VSTO) in its fourth quarter 2023 investor letter:

“Stock selection in the consumer discretionary sector also weighed on performance during the quarter. Outdoor sports and recreation product manufacturer Vista Outdoor Inc. (NYSE:VSTO) sold off after the company announced its deal to sell its sporting products business for lower than what the market anticipated. We believe the final price is heavily discounted to the intrinsic value of the business and ultimately elected to exit the position in order to consolidate our exposure in higher-conviction holdings.”