Outdoor financials: Kellwood quarterly profit up 30 percent, plus Sport Chalet and LaCrosse Footwear

Kellwood quarterly profit up 30 percent
Quarterly profit for Kellwood Co. (NYSE: KWD), parent of Sierra Designs, Kelty and Wenzel, rose 30 percent boosted in part by sales in men’s and women’s sportswear and new marketing initiatives.

Net earnings rose to $10.2 million, or 36 cents per share, for the second quarter ended July 31, 2004, from $7.9 million, or 29 cents per share a year ago — keeping inline with analyst’s predictions. Sales for the second quarter rose 10 percent to $560 million from 2003’s $509 million due to a combination of organic growth of $34 million, or 7 percent, and the acquisition of Phat Fashions and Phat Farm which provided $17 million of revenue, Kellwood said.

In its recent conference call, Kellwood management reported that it ended the quarter with an exceptionally strong balance sheet with ample liquidity to fund acquisitions to enhance its diversification.

Chairman and CEO Hal Upbin also said during the call that the company has experienced an uptick in camping sales and specialty is outperforming mass market, which hasn’t been the case before. The company had a drop off in at-once orders for mass market. It’s also withdrawing from the camping market in Asia.

Third-quarter sales are expected to rise 12 percent to 13 percent to between $720 million and $730 million, Upbin said. However, Wall Street analysts on average had been expecting the company to post revenue for the third quarter of $745.6 million. Upbin attributed the lower-than-expected results to a “recent softening in consumer demand for apparel, as indicated by fall orders from customers and some delays in launching certain new marketing initiatives from the third to the fourth quarter.” It expects sales for the fiscal year to remain on target at $2.6 billion.

The board of directors declared a regular quarterly dividend of $0.16 per common share, payable Sept. 20, 2004, to shareholders of record Sept. 7, 2004.

In other news, board member Martin Granoff has resigned effective Aug. 26, due to personal reasons. He had been on the board since 1999.

Sport Chalet chain expanding
Sport Chalet (Nasdaq:SPCH) celebrated the grand opening of its 32nd and 33rd store locations in Pleasanton and Roseville, Calif., over the weekend. The Pleasanton store is 42,000 square feet with an on-site pool at the Metro 580 Shopping Center. The Roseville store is 37,000 square feet in the Highland Reserve Marketplace.

LaCrosse getting out of the PVC boot biz
LaCrosse Footwear, Inc. (Nasdaq: BOOT) has sold certain assets of its PVC boot line to Onguard Industries, LLC. As a result, Lacrosse is exiting the manufacture and sales of PVC boots and will close its Claremont, N.H., facility. In a prepared statement, LaCrosse stated that the decision to get out of PVC manufacture was in line with the company’s strategic transition away from low-priced footwear. The company will continue to accept orders and ship product from its PVC inventory through Sept. 22. The Claremont-based facility manufactures PVC boots generating annual revenues of approximately $7 million and employing 70 people. In the third quarter, the company expects to report an estimated charge related to the sale and plant closure of approximately $900,000. SNEWS® View: Reading between the lines here, while a $7 million division might seem healthy, when you have 22 SKUs with the most expensive selling for $24.95 retail, the margins are so razor thin as to be virtually nonexistent. In other words, LaCrosse (which also owns the Danner brand) has wisely decided that where the company’s rubber meets the road to profit is not in the manufacture of cheap rubber boots you can buy anywhere.

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