Outdoor financials: Strong Euro pushes adidas-Salomon sales down in North America, plus LaCrosse, West Marine

adidas-Salomon sales decline in North America
For the first quarter of 2004, adidas-Salomon’s (OTC:ADDDF.PK) group sales increased 3 percent on a currency- neutral basis. In Euro terms, revenues declined 3 percent to Euro 1.623 billion (USD $1.927 billion) in 2004 from Euro 1.669 billion (USD $1.982 billion) in 2003. In the Salomon segment, revenues increased by 2 percent on a currency-neutral basis in the first quarter of 2004, largely due to positive developments in the cycling, Nordic and apparel categories. Currency effects from a strong Euro, especially versus the U.S. dollar, negatively impacted sales at all brands in Euro terms. As a result, Salomon sales in Euros were down 1 percent to Euro 122 million (USD $145 million) in the first three months of 2004 from Euro 124 million (USD $147 million) in the prior year.

From a regional perspective group sales in Europe grew 4 percent on a currency- neutral basis, boosted by increases in France, Iberia, the UK and the emerging markets. In North America, though, group sales declined 7 percent on a currency- neutral basis due to a decrease in footwear sales in the adidas Sport Performance division. In Asia, currency-neutral sales increased 6 percent driven by double-digit growth in Japan, China and Australia. In Latin America, where revenues are generated predominately by adidas, currency-neutral sales increased 43 percent in the first quarter, making it the fastest growing region within the group. Higher sales in Argentina, Brazil and Mexico were the main drivers of this improvement.

In Euro terms, currency translation effects negatively impacted sales in the first three months in all regions. Sales in Europe increased 2 percent in Euro terms to Euro 951 million (USD $1.13 billion) in the first three months of 2004 from Euro 933 million (USD $1.1 billion) in the prior year. In North America, sales in Euros declined 19 percent to Euro 328 million (USD $389 million) in 2004 versus Euro 405 million (USD $481 million) in 2003. In Euro terms, sales in Asia were down 2 percent to Euro 276 million (USD $328 million) in 2004 from Euro 281 million (USD $334 million) in 2003. In Latin America, sales in Euros grew 36 percent to Euro 49 million (USD $58 million) in 2004 from Euro 36 million (USD $43 million) in the prior year.

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LaCrosse reports Q1 earnings
LaCrosse Footwear Inc. (Nasdaq: BOOT), parent of Danner boots, reported results for the first quarter ended March 27, 2004. Its consolidated net sales were $23.7 million, up 19.4 percent from $19.9 million in 2003. Consolidated net income was $1.1 million, or $0.18 per share, in the first quarter of 2004, up from a net loss of $0.6 million, or a net loss of ($0.11) per share, in the same period of 2003. Gross margins were 30.5 percent in the first quarter, up from 30.1 percent in 2003, reflecting increased sales from new higher-margin products. Operating expenses were $6.0 million in the quarter, down 5.2 percent from the year before.

Retail sales of LaCrosse brand products increased in the first quarter of 2004 compared to the same period of 2003, due to the introduction of the Quad Comfort line of work boots, increased sales of sporting boots, as well as strong sales of winter boots and waders. Sales for Danner brand products increased during the first quarter of 2004 compared to the same period in 2003, driven by the successful introduction of new recreational products, as well as a large purchase by the U.S. military.

West Marine posts 12.9 percent net sales increase
West Marine Inc. (Nasdaq:WMAR), a specialty retailer of boating supplies and apparel, reported that net sales for the four weeks ended May 1, 2004, were $67.8 million, a 12.9 percent increase from net sales of $60.0 million for the four-week period a year ago. Comparable store net sales for April increased 7.6 percent compared to the same period a year ago. Comparable store sales by region were: West Coast 10.8 percent, Northeast 10.4 percent and Southeast 2.0 percent. Net sales for the 17 weeks ended May 1, 2004, were $197.0 million, an increase of 15.1 percent from net sales of $171.2 million for the same period a year ago. Comparable store net sales for the latest 17 weeks increased 9.2 percent compared to the same period a year ago.

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