Outdoor financials: Deckers Q4 earnings up 30 percent, plus VF, Crocs, Rocky, Liz Claiborne, adidas/Reebok, Cabela's, West Marine, Amer

Deckers Q4 earnings up 30 percent
Deckers Outdoor Corp. (Nasdaq: DECK) reported that fourth-quarter earnings jumped 30 percent, buoyed by strong sales of its Ugg product line, and the company increased its 2006 guidance. Sales, though, for its Teva and Simple brands were down.

Fourth-quarter net sales increased 22.6 percent to a record of $91.0 million versus $74.2 million in the same period last year. Net earnings for the quarter increased to $12.1 million, compared to net earnings of $9.2 million last year, and earnings per diluted share increased 30.6 percent to $0.94, versus earnings per diluted share of $0.72 in 2004.

For the year, earnings improved 25 percent to $31.8 million, or $2.48 per share, compared with $25.5 million, or $2.10 per share, last year. Sales were up 23 percent to $264.8 million from $214.8 million last year.

Including sales from both the wholesale divisions and the consumer direct (Internet, catalog and retail outlet division) business, Teva net sales for the fourth quarter were down slightly to $11.3 million versus $11.8 million last year. Ugg net sales increased 30.4 percent to $78.5 million compared to $60.2 million a year ago, driven by strong sales across the board. Simple sales decreased 44.4 percent to $1.2 million compared to $2.2 million for the same period last year. The fourth quarter of 2004 included approximately $1.0 million of sales of the Simple sheep offering, a program which the company discontinued in late 2004.

For the 2005 full year, Teva net sales were $85.2 million compared to $88.2 million in 2004, Ugg net sales in 2005 increased 47.7 percent to $171.6 million (its eighth consecutive year of double digit growth) versus $116.2 million last year, and Simple net sales were $7.9 million compared to $10.3 million a year ago.

“While Teva’s sales were down slightly year-over-year, we are very encouraged by our initial results aimed at reducing the brand’s dependency on warm weather,” said Angel Martinez, Deckers’ president and CEO. “To that end, we have had good response to our fall 2006 product offering and will continue to make key investments in research and development in order to more effectively leverage our proprietary technologies and create a more complete line of closed-toe footwear. In addition, for 2006 we have increased our worldwide marketing expenditures as we look to revitalize our presentation at retail and attract a younger consumer to the brand, building on our foundation as an authentic outdoor performance brand.”

Martinex added that in 2006, the company is expecting double-digit growth for the Simple brand as it introduces new athletically inspired casual products, launches its new “9 to 5” collection of leather casual footwear and begin deliveries of its Green Toe collection of environmentally friendly footwear.

Overall, inventories decreased to $33.4 million at Dec. 31, 2005, from $66.8 million at Sept. 30, 2005, and compared to $30.3 million at Dec. 31, 2004.

For 2006, Deckers said it now expects net sales to range from $260 million to $270 million compared to its previous guidance of $255 million to $265 million. It also raised the low end of its previous earnings per diluted share guidance and now expects to report earnings of $2.05 to $2.15 per diluted share. It reiterated its previous guidance for the first quarter of 2006 with net sales in the range of $48 million to $50 million and earnings per diluted share of $0.22 to $0.24.

Shares rose 90 cents, or nearly 3 percent, in after-hours trading. They closed the regular Nasdaq session down $1.69, or almost 5 percent at $33.90 on the Nasdaq on Feb. 28.

VF names new president/COO and CIO
Eric Wiseman has been appointed president and chief operating officer of VF Corp. (NYSE: VFC), parent of The North Face and JanSport, assuming responsibility for day-to-day operations and overseeing the opening of about 400 new stores over the next five years.

Wiseman was previously executive vice president of VF’s global brands, and will continue to report to Chairman and CEO Mackey McDonald. In his continuing role, McDonald will continue to focus on VF’s strategic direction, the evolution and accomplishment of the long-term growth plan, and the business portfolio. As president and COO, Wiseman will continue to have responsibility for VF’s Jeanswear, Intimates, Outdoor and Sportswear Coalitions, and for Customer Management.

Wiseman has been with VF since 1995 and has held a progression of leadership roles at company, including vice president of VF’s Outdoor and Sportswear Coalitions.

VF then announced on Friday that it had added the second top executive position in a week, this time tapping Martin Schneider as global chief information officer, a new position. Schneider was most recently vice president of global technical and manufacturing systems for Gillette Co., which Procter & Gamble Co. bought in October.

Crocs’ Q4 and FY ’05 results take significant leap from last year
After going public earlier this year, Crocs (Nasdaq: CROX) reported double-digit increases across the board for its fourth-quarter and full-year earnings results.

For the fourth quarter, revenues were $33.6 million compared to $5.4 million in 2004. Net income was $4.1 million, or $0.12 per fully diluted share, compared to a net loss of $1.0 million, or $0.04 per share, for the three months in 2004. The net income includes a non-cash stock-based compensation expense of $1.3 million for the 2005 quarter and $357,000 for the 2004 quarter. Gross profit was $17.8 million, compared to last year’s $2.4 million, and selling, general and administrative expense was $10.9 million this quarter versus $3.5 million in 2004.

For the 2005 fiscal year, revenues were $108.6 million, compared to revenues of $13.5 million in 2004. Net income for 2005 was $16.7 million, or $0.51 per fully diluted share, compared to a net loss of $1.6 million, or $0.07 per share, for 2004. For the year, its net income also included a non-cash stock-based compensation expense of $4.7 million compared to $1.8 million for 2004. Gross profit for 2005 was $60.8 million, compared to $6.4 million for 2004, and selling, general and administrative expense was $33.9 million for 2005, compared to $7.9 million for 2004.

Crocs completed an initial public offering of 11,385,000 shares of common stock at $21 per share on Feb. 13. The company sold 4,950,000 shares and netted $96.9 million. The remaining 6,435,000 shares were sold by other shareholders who made $126.0 million. Crocs said it is using the proceeds to repay bank loans and for working capital and general corporate purposes. Since the results were reported within the 25-day period following the company’s IPO, it did not host an earnings conference call.

Its shares closed at $26.60 on March 2 after trading between $26.50 and $27.42 on the Nasdaq.

Rocky’s Q4 sales increase 128 percent
Rocky Shoes & Boots (Nasdaq: RCKY) announced record fourth-quarter results, boosted significantly by its acquisition of EJ Footwear Group, which contributed $41.8 million in revenue for the quarter.

Net sales for the fourth quarter increased 128 percent to a record $74.9 million compared to $32.9 million for the corresponding period a year ago. Net income rose 19 percent to a record $2.6 million versus net income of $2.2 million last year. Diluted earnings per share increased to $0.46 versus $0.43 a year ago.

Gross profit increased to $28.7 million, or 38.4 percent of sales, from $9.3 million or 28.1 percent of sales, for the same period last year. The 1030 basis point increase was primarily due to sales of EJ Footwear product which carry a higher gross margin than Rocky products. Selling, general and administrative (SG&A) expenses were $22.7 million, or 30.3 percent of sales for the fourth quarter of 2005 compared to $6.6 million, or 20.0 percent of sales, a year ago. The increase was primarily a result of higher SG&A associated with the EJ Footwear business.

Income from operations for the quarter increased to $6.0 million or 8.0 percent of net sales for the period from $2.7 million or 8.2 percent of net sales in the prior year.

For the full year ended Dec. 31, 2005, net sales increased 124 percent to a record $296.0 million compared to net sales of $132.2 million in 2004. Net income rose 51 percent to $13.0 million versus net income of $8.6 million a year ago, and diluted earnings per share rose 34 percent to $2.33 versus $1.74 for the corresponding period last year.

Also for the 2005 year, gross profit increased to $112.2 million, or 37.9 percent of sales, from $38.6 million, or 29.2 percent of sales, last year. SG&A expenses were $84.1million, or 28.4 percent of sales compared to $25.6 million, or 19.4 percent of sales, a year ago. Income from operations increased to $28.1 million or 9.5 percent of net sales versus $13.0 million or 9.8 percent of net sales in the prior year.

“Fiscal 2005 was an historic period for our company, highlighted by our record sales and profits. During the past 12 months we have made important strides expanding our position in the industry, diversifying our product mix, and broadening our channels of distribution. We also made key investments to our infrastructure and enhanced our operating platform in order to better support our future growth plans,” said Mike Brooks, Rocky’s chairman and CEO, in a statement.

For 2006, Rocky said it expects revenues to be in the range of $287 million to $292 million, and diluted earnings per share to be in the range of $2.28 to $2.38, including a non-cash charge of approximately $0.07 per share related to stock option expensing. Excluding stock option expensing, the Company expects diluted earnings per share to be in the range of $2.35 to $2.45. It added that its guidance for fiscal 2006 does not include any footwear sales to the military compared to approximately $27.7 million in fiscal 2005.

Liz Claiborne Q4 profit takes a hit
Prana’s parent Liz Claiborne (NYSE: LIZ) reported that its fourth-quarter profit declined 5 percent, weighed by stock option expense and lower wholesale revenue. Its fourth-quarter net income was $78.3 million, or $0.74 per share, versus a prior-year profit of $82.7 million, or $0.75 per share. The results still beat analysts’ average estimate of $0.72 per share.

Revenue was up 0.2 percent to $1.2 billion. Unfavorable foreign exchange rates in the company’s international businesses reduced sales by $10 million. Retail sales jumped 10.4 percent to $368 million, lifted by growth in the company’s specialty retail business. Sales in stores open at least one year rose 3.9 percent in the quarter.

Looking ahead, Liz Claiborne projected fiscal 2006 earnings from $2.58 to $2.73 per share, on sales growth in the low single-digit range. The forecast includes stock options expense, restructuring costs and other items, which will collectively reduce profit by $0.36 per share.

Shares of Liz Claiborne rose $1, or 2.8 percent, to $37.03 on the New York Stock Exchange.

adidas reports Q4 loss on Reebok acquisition
With Reebok firmly under its wing, adidas (ADSG.DE) now has to get the U.S. company on more stable ground financially as can be seen from its recently reported fourth-quarter loss.

The German company lost Euro 4 million (USD $4.78 million), or 2 euro cents a share, in the fourth quarter. That compares with a fourth-quarter profit of Euro 20 million, or 45 euro cents a share, a year earlier. It said part of the loss was from costs related to its takeover of Reebok and expenses ahead of this summer’s soccer World Cup

adidas said marketing expenses rose, but revenue also was up 27 percent to Euro 1.5 billion (USD $1.8 billion), as demand for sneakers and World Cup-themed products like jerseys increased overall orders.

The company also said Reebok reported a $47.4 million net profit in the fourth quarter on revenue of $930 million.

For the year, adidas’ net profit rose 30 percent to Euro 434 million (USD $518 million), or 7.73 euros (USD $9.23) a share. That compared with Euro 333 million, or 6.54 euros a share, in 2005. Revenue rose more than 12 percent to Euro 6.6 billion (USD $7.9 billion) from Euro 5.86 billion. The 2005 figures were revised to reflect adidas’ May sale of its Salomon unit to Amer Sports for Euro 485 million.

Despite the fourth-quarter decrease, CEO Herbert Hainer said the company was poised to raise its earnings by more than 10 percent this year, with revenue increasing in the “high single-digit” percentage range. Both of those figures excluded Reebok. Despite the hit to its earnings, Hainer added that Reebok’s sales are expected to reach approximately Euro 2.8 billion (USD $3.3 billion) in 2006.

Looking ahead to the end of 2006, Hainer said sales should rise in the single digits, with double-digit growth forecast for Asia and North America, and growth in Latin America.

Shares of the company fell 6.1 percent to close at 155 euros (USD $184.99) in Frankfurt trading on March 2.

(Conversion of Euros into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of March 2.)

Cabela’s closes offering of senior notes
Cabela’s (NYSE: CAB) said it has sold $215 million aggregate principal amount of its 5.99 percent senior notes due 2016 in a private placement to qualified institutional buyers. The company added that it intends to use the proceeds from the offering for new retail store expansion, including capital expenditures, purchase of economic development bonds and general corporate purposes.

West Marine releases preliminary earnings, but cancels call
Despite canceling its scheduled conference call to report earnings, West Marine (Nasdaq: WMAR) released preliminary unaudited operating results for the fourth quarter and 2005 full year.

West Marine said it postponed its conference call on March 2 to review uncompleted software development projects. If the projects no longer provide a future benefit, the company may be required to realize a non-cash impairment charge, it added.

Preliminary unaudited net loss for the fourth quarter was $17.4 million, or $0.82 per share, significantly higher than its net loss of $3.4 million, or $0.16 in 2004. Net sales for the fourth quarter were $124.8 million, compared to $118.1 million a year ago. Same-store sales for the quarter increased 3.9 percent.

For the year, its unaudited net income was $2.0 million, or $0.09 per share, compared to $25.5 million, or $1.20 per share, a year ago. Net sales were $692.3 million, compared to net sales of $683.0 million for fiscal year 2004. Same-store sales for the year decreased 2.2 percent.

Amer Sports offers published 2005 annual report
Amer Sports’ 2005 annual report is now available in English and Finnish. A printed version of the report can be ordered by e-mail from amer.communications@amersports.com or by calling Taina Harala at +358 9 7257 8309. It can also be downloaded as a PDF file from the company’s website, www.amersports.com.

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