Some May Be Optimistic About Johnson Outdoors' (NASDAQ:JOUT) Earnings

Investors were disappointed with the weak earnings posted by Johnson Outdoors Inc. (NASDAQ:JOUT ). While the headline numbers were soft, we believe that investors might be missing some encouraging factors.

View our latest analysis for Johnson Outdoors

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Johnson Outdoors' profit was reduced by US$6.6m, due to unusual items, over the last year. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And, after all, that's exactly what the accounting terminology implies. In the twelve months to September 2023, Johnson Outdoors had a big unusual items expense. All else being equal, this would likely have the effect of making the statutory profit look worse than its underlying earnings power.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On Johnson Outdoors' Profit Performance

As we mentioned previously, the Johnson Outdoors' profit was hampered by unusual items in the last year. Based on this observation, we consider it possible that Johnson Outdoors' statutory profit actually understates its earnings potential! Unfortunately, though, its earnings per share actually fell back over the last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. While conducting our analysis, we found that Johnson Outdoors has 2 warning signs and it would be unwise to ignore them.

This note has only looked at a single factor that sheds light on the nature of Johnson Outdoors' profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.