Vista Outdoor Inc. (NYSE: VSTO) reported second-quarter fiscal 2018 results before markets opened Thursday. The ammunition and outdoor products company posted adjusted diluted earnings per share (EPS) of $0.34 on revenues of $587.3 million. In the same quarter a year ago, Vista reported earnings of $0.74 per share on revenues of $684.3 million. The consensus estimates for the quarter had called for $0.27 in EPS and $589.98 million in revenue.

On a GAAP basis, Vista posted a net per share loss of $2.01, compared to EPS of $1.22 in the year-ago quarter. Gross profit fell 25%, including a pickup of $3 million from an acquisition and a 27% drop in organic net profit. Operating expenses rose from $81 million a year ago to $266 million, primarily due to a $152 million goodwill and intangibles impairment charge. Adjusted net income fell from $44.34 million to $19.5 million.

The firm also reported a charge of $8.7 million in CEO transition costs. Former CEO Mark DeYoung stepped down in July and new CEO Christopher Metz took over in early October. Metz had been CEO of Arctic Cat until its acquisition by Textron in March.

Referring to the $152 million impairment charge, Chief Financial Officer Stephen Nolan said:

The impairment was triggered by increased downward pressure on sales and margins as a result of challenging market conditions that have persisted longer than previously expected. These challenging market conditions have been exacerbated by additional customer bankruptcies and consolidations. We continue to see high channel inventories for our Hunting and Shooting Accessories business. We expect these inventory levels will take the remainder of the fiscal year to work through, and will continue to put pressure on sales and margins. Our Sports Protection business has been impacted by the ongoing challenges facing the cycling industry broadly and by reduced retail space for our products.

The market contraction and competitive environment I mentioned earlier will have more of an impact in the second half of the year than it did in the first half, including the full impact of the ammunition pricing action, which we took in the first and second quarters. While we have taken actions to reduce costs, these initiatives have been more than offset by persisting market conditions. As a result, we are revising our FY18 financial guidance for the year.

The company slashed its fiscal year 2018 guidance and now expects sales to fall in a range of $2.24 billion to $2.26 billion — from a prior range of $2.36 billion to $2.42 billion — and adjusted EPS of $0.50 to $0.60, down from a prior estimate of $1.10 to $1.30.

In the first fiscal quarter, Vista reported adjusted EPS of $0.24. For the first two quarters the total is $0.58. The company is apparently not expecting much in the second half of its fiscal year, and neither are investors.

For the record, analysts had estimated third-quarter EPS of $0.41 and sales of $627.35 million. For the full fiscal year, analysts were looking for EPS of $1.24 and sales of $2.39 billion. Those estimates will come down sharply.

The stock traded down nearly 24% in Thursday’s premarket at $14.12, below the 52-week range of $17.86 to $41.29. The consensus 12-month price target is $24.79.

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