Vista Outdoor's Stock Plunges As Weak Retail Trends Force 'material' Impairment Charge

Vista Outdoor Inc.'s stock plunged 17% toward a record closing low in active morning trade Thursday, after the maker of guns, ammunition and other outdoor sports products said an increasingly challenging retail environment will force it to record a "material" asset impairment charge. The stock was the biggest decliner listed on the New York Stock Exchange, on volume that was already almost triple the full-day average. The company said late Wednesday that the third-quarter impairment charge could be in the range of $400 million to $450 million. In comparison, the FactSet consensus for net income is $42 million for the third quarter, and $188.6 million for the full fiscal year. Vista had said in a conference call following fiscal second-quarter results revenue and gross margin declined as a challenging retail environment led to deeper discounting. "These sales and gross margin trends accelerated during the company's recently completed third quarter to the point where this impairment charge is necessary to comply with accounting standards," the company said in a statement. The stock has now tumbled 31% over the past year, while the S&P 500 has climbed 17%.