Escalade (NASDAQ:ESCA) reported fourth-quarter net income of $3.7 million on Friday, as the sporting goods maker successfully leveraged operational efficiencies to overcome a persistent cooling in broader consumer discretionary spending.
On a per-share basis, the Evansville, Indiana-based company earned $0.27, up from $0.19 in the prior-year period.
The profit growth came despite a 2.2% dip in quarterly net sales, which fell to $62.6 million.
Escalade attributed the revenue decline to "uneven consumer demand" across most categories, though it saw pockets of strength in its archery, billiards, and indoor games segments.
For the full year, sales dropped 4.5% to $240.2 million.
Management’s focus on the bottom line was evident in a 280-basis-point expansion of gross margins, which reached 27.7% in the quarter.
The company credited lower fixed costs and reduced inventory handling expenses for the improvement.
Meanwhile, cash generation remained a highlight, with $14.9 million in cash provided by operations during the quarter, allowing Escalade to slash its total debt by nearly 28% to $18.5 million.
The company, which recently integrated the acquisitions of Gold Tip and AllCornhole, signaled confidence in its deleveraged balance sheet by raising its quarterly dividend to $0.1525 per share.