Vista Outdoor CEO Chris Metz talks M&A, the return to REI, and more

Three years ago, a pair of prominent North American outdoor retailers—REI Co-op and MEC—stopped selling products made by Vista Outdoor Inc. brands CamelBak, Giro, and Camp Chef because of the parent company’s ownership of a firearms manufacturer.

When the Anoka, Minn.-based company later sold that asset, Savage Arms, those stores eventually allowed its brands to return—though Vista’s corporate and brand leadership admitted they would have to earn their way back onto the retailers’ shelves.

While the roughly yearlong boycott by REI and MEC didn’t represent a huge financial loss for the company, Vista CEO Chris Metz told Outside Business Journal that missing those channels was a blow to the brands’ standing in the outdoor world.

“The importance of an REI goes beyond the top line,” Metz told us this week. “In total, they represented less than 1 percent of our sales, but it’s more about the halo effect that REI provides to our brands.”

Fast forward about a year and a half, and it’s apparent that the company is back on track. Or, as Metz put it, Vista has “regained its mojo.”

In its most recent quarter, Vista reported nearly 40 percent revenue growth and posted a profit of $67.4 million, more than making up for a significant loss in the year-ago period. Its outdoor products division, which includes CamelBak, Camp Chef, Bell, Giro, and Bushnell, posted a sales increase of 47 percent to $193 million, driven primarily by the pandemic-fueled outdoor recreation boom.

Now the company is poised to continue—and even accelerate—that momentum. During Vista’s virtual Investor Day earlier this week, the company announced the acquisition of two companies (QuietKat and Venor) and laid out its plans for future growth across its portfolio.

OBJ wanted to hear more about Vista’s path during the last couple of years, what drove this week’s deals, and how it views future M&A opportunities, so we spoke with Metz following the company’s presentation. Here’s what he shared.

What drove the two acquisitions announced this morning, and what is the potential for each of the company’s new assets?

Acquisitions can’t just be monetarily driven. There’s got to be a strong cultural fit. [QuietKat founders] Jake and Justin Roach are super creative and passionate. They have done a nice job building out this company, but they lacked sophistication in the backend, which is very common for entrepreneurs. They develop great products and great brands, but the backend capability, which is kind of boring, is more in our wheelhouse. We provide that at Vista for these smaller brands. It’s a wonderful cultural fit in a category that is just exploding. Venor is the same type of thing. [Venor founder] Angie Erickson is a creative design founder who I got to know years ago. The female market is dramatically underserved because it’s all “pink it and shrink it.” We believe we can do a lot better than that.

Does Vista remain acquisitive and, if so, what categories would the company target?

We are squarely focused on the outdoor products industry, and we have a robust pipeline. We’ve also got a lot of firepower: We’ve got next to no debt right now and we’re generating a lot of free cash flow. We’ll look in all our existing platforms, but we’ll also look in other platforms that we think are natural fits for us. Now, e-bikes and women’s apparel, so to speak, are our two new platforms. We’ll look to categories that are big and might be fragmented, and that have good growth opportunities, a diverse end-user base, and would fit well with our channels of distribution. Those are the perfect acquisition candidates for us.

At Vista’s last Investor Day, Greg Williamson told the audience that CamelBak would need to “earn its shelf space” at the retailer; how has that process gone not only for CamelBak but also Camp Chef and Giro?

When I walked in [to Vista] three and a half plus years ago, we weren’t winning. We still had No. 1, No. 2 share position brands, but we had to create the environment to allow them to prosper. Our retailers—whether it be REI, Dick’s, Backcountry.com, or others—have been doing a wait-and-see on if we can regain our mojo. Well, they’ve seen it in a big way. They’ve all come to us and said, “Hey, we want to get to know you better. If you win, we win.” CamelBak was a perfect entree back into REI, and it helped Camp Chef, Giro, all our brands that sell through REI. We’re in a position now that’s better than any point in time in Vista’s history. 

Can you quantify how much the return to REI has impacted the top line for Vista?

The importance of an REI goes beyond the top line. In total, they represented less than 1 percent of our sales, but it’s more about the halo effect that REI provides to our brands. They were very frank with us when they said, “Hey, we don’t want to go to market without the best leading brands or we aren’t offering our consumers a truly great shopping experience. We need CamelBak in our stores. We need Camp Chef in our stores. But it’s got to be the right way.” I’ve gotten to know them personally over the years—and I called on them for years and years before—and it’s a nice road back because we delivered against everything we said we were going to deliver. They’ve seen it, and I think they believe in the trajectory of each of our brands.

Any parting thoughts about Vista or the outdoors segment in general?

Going back to your question about if we’re still going to be acquisitive: When I walked in, it was all about re-creating the magic within our brands, instilling that founder’s mentality in our brands, and developing a reputation as a home of the best brands that can prosper because of what we do well. We’ve worked hard to regain our reputation. We want people in the industry to know that we’re a great home for a number of different outdoor products businesses. That’s what we’re striving to do—create that environment and that culture that allows them to grow. You’re going to see us become more acquisitive in the outdoor space.