Outdoor financials: Phoenix reports Q3 net sales increase of 47.9 percent, plus adidas, LaCrosse, Sportsman's Guide, Amer

Phoenix reports Q3 net sales increase of 47.9 percent
Third-quarter net sales for Phoenix Footwear’s (AMEX: PXG) Royal Robbins brand were up 15.6 percent, while most of its other brands saw a decline as a result of the loss of its Dillard’s account.

Net sales for Royal Robbins in the quarter were seasonally strong at $7.4 million compared to $6.4 million a year ago. It opened up several new accounts including 18 Academy Sports doors, with additional growth planned for spring 2006. The brand has booked double-digit growth in spring futures with each of its key national accounts.

Also, Phoenix has finalized an agreement with its Canadian distributor to take back the distribution rights for Royal Robbins. Beginning in 2006, it will begin selling directly in Canada, which the company said should result in higher sales and better margins.

Net sales for H.S. Trask declined 8.9 percent in the third quarter to $1.8 million, compared to $2.0 million a year ago. Trotters sales also decreased 9.7 percent to $4.2 million, compared to $4.7 million for the same quarter a year ago. SoftWalk posted net sales of approximately $3.0 million for the third quarter, down 10.6 percent from $3.3 million in 2004. Negative sales growth for all was primarily a result of the loss of the Dillard’s business, Phoenix said.

For the entire company, net sales for the third quarter increased 47.9 percent to $34.3 million compared to $23.2 million for the third quarter of 2004. Phoenix said the strong top-line growth was primarily attributable to $11.7 million, or 34.1 percent of total sales, generated by its two recently acquired brands, Chambers and Tommy Bahama. Organic growth was flat, though, as the increase in the Royal Robbins was offset by declines in the other brands.

Net income for the third quarter was $981,000, or $0.12 per diluted share, compared to net income of $1.7 million, or $0.24 per diluted share, for the comparable quarter a year ago.

Operating costs increased 41.2 percent to $9.8 million, compared to $6.9 million in the third quarter of 2004 due primarily to $3.3 million in operating costs associated with the recently acquired Chambers and Tommy Bahama brands. Operating income for the third quarter was $2.8 million, down slightly from $2.9 million in the third quarter of 2004. Additionally, the operating margin of 8.2 percent decreased compared to an operating margin of 12.6 percent for the comparable quarter a year ago.

Historically, Phoenix has given guidance, but said for the time being, it will longer do so. The Company said it feels that given the transitional state it is in, and the nature of its current business, it is not prudent to give specific revenue or earnings guidance at this time.

adidas reports Q3 earnings
As it gets closer in its bid to takeover Reebok, adidas-Salomon (ADS.DE) reported a third-quarter net profit increase of 20 percent and that earnings for the year would rise a like amount.

The company earned Euro 215 million (USD $259 million), or Euro 4.36 (USD $5.26) a share, compared with Euro 179 million (USD $216 million), or Euro 3.92 (USD $4.73) a share, in the year-ago period. Excluding results from its discontinued operations — particularly its Salomon unit, which it sold to Finland’s Amer Sports Corp. earlier this year — the company earned Euro 209 million (USD $252 million), up 28 percent, and beat analysts’ expectations of Euro 190 million (USD $229 million). Sales rose 9.4 percent to Euro 1.92 billion (USD $2.31 billion) from Euro 1.76 billion (USD $2.12 billion) in 2004.

This is also the last quarter that includes results from Salomon, which was sold to Amer Sports in a deal that closed Oct. 20.

adidas said it is now seeing a high-single-digit increase in revenue on a currency neutral basis due to increased expectations in North America, and said net profit should rise at least 20 percent in 2005 and by at least 10 percent in 2006.

adidas said that it was confident its planned $3.8-billion-takeover of rival Reebok would lead to an earnings jump despite a sales slump at Reebok in its third-quarter sales. CEO Herbert Hainer reiterated the merged group would see double-digit net income growth in the medium term, while sales are expected to grow by a mid-to-high single digit percentage.

“Clearly there are challenges that Reebok will solve but these were not unknown when we made our offer in August and we remain fully confident in the synergies,” he said.

Reebok shareholders are scheduled to vote on the merger at a general meeting in December or January, with the transaction forecast to close in the first half of 2006. adidas is in the process of filing for European anti-trust approval for the takeover after U.S. authorities had voiced no objections.

Additionally, adidas said it plans to raise around Euro 640 million (USD $772.6 million) in fresh capital to help finance its takeover of Reebok by selling 4.5 million shares — about 10 percent of its outstanding share capital — to institutional investors. The issue will exclude subscription rights for existing shareholders, it added.

(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 Nov. 3.)

LaCrosse reports lower numbers for Q3
Danner’s parent LaCrosse Footwear (Nasdaq: BOOT) reported lower third-quarter net sales of $31.0 million, compared to $34.5 million in the third quarter of 2004. Net income was also down — $2.5 million, or $0.40 income per common share, compared to $3.9 million, or $0.64 income per common share in 2004.

Sales in the third quarter of 2004 included $2.8 million from General Services Administration delivery orders for uniform boots and $1.6 million from the discontinued PVC boot line. Excluding sales from GSA delivery orders and PVC in the third quarter of 2004, consolidated net sales grew 3 percent year-over-year in the same period of 2005. During the third quarter of 2005, increased petroleum prices and a general slowdown in consumer spending adversely impacted sales growth, it said.

Sales to the outdoor market were $18.9 million for the third quarter of 2005, up 1 percent from $18.7 million in 2004. Because sales to the outdoor market are based more on discretionary consumer spending, the challenging economic trends strongly impacted outdoor sales in the third quarter of 2005, LaCrosse said. It added that the modest sales growth reflects its successful introduction of new fall product lines and continued penetration into the hunting and rubber boot markets.

Sales to the work market were $12.1 million for the third quarter of 2005, compared to $15.8 million in the same period of 2004.

LaCrosse said inventory increased by $10.7 million due to: establishing new product lines; increasing customer service response times; support of anticipated fall and winter demand; and additional inventory related to lower than anticipated sales. Inventory levels historically decline during the fourth quarter of the year.

Internet-related sales boost Sportsman’s Guide’s Q3 profit
For the third quarter, The Sportsman’s Guide (Nasdaq: SGDE) posted a nearly 8 percent increase in consolidated net sales as a result of sales growth at both The Golf Warehouse and The Sportsman’s Guide.

Net sales for the quarter were $61.5 million, compared with $57.0 million reported for the same period in 2004. Net earnings were $2.2 million, or $0.26 per fully diluted share, a 50 percent increase over the $1.4 million, or $0.17 per fully diluted share, reported for the same period in 2004. The earnings per share numbers for 2004 have been restated to reflect the company’s change in accounting policy for Buyer’s Club revenues announced in June of this year and adjusted to reflect the 3-for-2 stock split, distributed April 15, 2005.

The company said that Internet-related sales were nearly 60 percent of total catalog and Internet sales for the quarter. It also noted that the recently completed quarter is the first where the results are comparable with those of the previous year given that the 2004 third quarter also included the results of The Golf Warehouse, acquired June 29, 2004.

Amer told Franklin Resources owns nearly 5 percent capital
Finnish Securities notified Amer Sports that the total number of shares held by the mutual funds and separate accounts managed by the affiliated investment adviser of Franklin Resources represents 4.73 percent of the company’s share capital and voting rights. Amer’s capital consists of 71.419.860 shares in issue.

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