Outdoor financials: VF takes $28.7 million profit hit from new accounting rules, plus Columbia, Gander Mountain, Kellwood, Johnson Outdoors, Deckers, Hibbett, Reebok/adidas, Sportsman's guide, Liz Claiborne

VF takes $28.7 million profit hit from new accounting rules
VF Corp. (NYSE: VFC), parent of The North Face, JanSport and Eastpak, said it will restate its quarterly financials for 2005 and take a $28.7 million charge to its profits as it adopts new accounting rules for expensing stock options and other stock-based compensation.

The charges will cost the company a total of $0.25 per share for the year. Through the first three quarters of the year VF reported $3.54 per share in fully diluted earnings.

Restated 2005 quarterly financial statements and other data will be included in the company’s fourth-quarter earnings release on Feb. 8.

Columbia reports Q4 profit dip
Despite double-digit increases in footwear and sportswear sales, Columbia Sportswear’s (Nasdaq: COLM) profit dropped 7 percent in the fourth quarter.

Columbia earned $36.6 million, or $0.97 per share, in the fourth quarter of 2006, down from $39.4 million, or $0.97 per share, for the same quarter in 2004. Sales increased 4 percent to $314.1 million from $301.8 million in the year ago period. Analysts had projected earnings of $0.83 per share on sales of $305.1 million.

For the fourth quarter of 2005, footwear sales increased 19.9 percent to $63.3 million, sportswear sales increased 11.5 percent to $90.0 million, equipment sales increased 20.0 percent to $1.2 million, accessories sales decreased 3.2 percent to $12.2 million, and outerwear sales decreased 4.7 percent to $147.4 million, compared to the fourth quarter of 2004.

Compared to the fourth quarter of 2004, other international sales increased 17.5 percent to $51.8 million, European sales increased 14.3 percent to $50.3 million, U.S. sales increased 2.4 percent to $185.4 million, and Canadian sales decreased 18.4 percent to $26.6 million for the fourth quarter of 2005.

Excluding changes in currency exchange rates, consolidated net sales increased 5.0 percent, European sales increased 21.6 percent, other international sales increased 19.7 percent, U.S. sales increased 2.4 percent to $185.4 million and Canadian sales decreased 22.2 percent for the fourth quarter of 2005, compared to the same period of 2004.

For fiscal year 2005, the company earned $130.7 million, or $3.36 per share, down 6 percent from $138.6 million, or $3.40 per share, in 2004. Sales increased 6 percent to $1.2 billion from $1.1 billion the year before. Analysts had expected the company to earn $3.33 per share on sales of $1.1 billion.

“Columbia is committed to remaining a growth company. During the last few years, we have made significant infrastructure investments to support future growth plans,” said Tim Boyle, Columbia’s president and CEO. “While we are disappointed with our 2005 revenue results, sales came in as projected, and we are generally satisfied with our expense management. We believe the initiatives we are implementing to drive international expansion and footwear and sportswear product category growth, as well as the improvements being made to stabilize our North American outerwear business, position us for continued long-term growth.”

Boyle said the company expects first quarter 2006 earnings to be down about 25 percent, or about 15 percent excluding stock option expenses, from the year ago period, despite an anticipated 1 percent increase in sales.

Gander Mountain releases preliminary ’05 earnings
In early 2005 projections, Gander Mountain (Nasdaq: GMTN) said it anticipates a 20 percent to 25 percent increase in pretax income of $21 million to $22 million over its 2004 fourth quarter.

The company said it anticipates that sales for the 2005 quarter will total $275 million to $280 million, compared to $237 million for the same period of the prior year, a gain of at least 16 percent. On the down side, comparable store sales are expected to decline 7 percent to 8 percent.

For the 2005 full year, Gander Mountain estimates that the pretax loss will be $13.5 million to $14.5 million on sales of approximately $800 million. In fiscal 2004, the company reported a pretax profit of $1.6 million on sales of $642.1 million. The company estimates that at fiscal year end its inventory will be approximately $310 million, and the company expects to be in compliance with all covenants of its credit facility. Comparable store sales are expected to decline approximately 6 percent for the full year.

“We expect to achieve a higher operating profit margin in the fourth quarter compared to last year, due in part to reduced clearance activity and improved cost controls at the store level,” said Mark Baker, president and CEO. “As we improve our sales and gross margin performance, continue to build our store base and contain our operating costs, we expect to see further improvement in our operating margin.”

Gander Mountain’s fourth-quarter earnings release is scheduled for early March.

Kellwood anticipates $89 million fiscal-year loss
Kellwood (NYSE: KWD), parent of the Sierra Designs and Kelty brands, said it’s forecasting a loss for fiscal year 2005 of $89 million, or $3.29 per share, partly due to retailer consolidations and lower sales of off-price merchandise, along with the company’s plan to exit specific private-label programs. In the 2004 fiscal year, the company reported net profit of $70.1 million.

Results for fiscal 2005 would include $135 million in restructuring costs, but those charges are not expected to be duplicated in the following fiscal year, Kellwood said. Current-year earnings from ongoing operations would be $44 million, with a similar amount next year. Earnings per share, however, are projected to increase by 4.3 percent to $1.70 per share, due to an expected drop in the number of shares outstanding.

For the first quarter of 2006, Kellwood estimated a profit of $4 million, or $0.15 per share. On average, analysts expect Kellwood to earn $0.23 per share for the quarter. In the year-ago quarter, the company posted net earnings of $11.9 million, or $0.42 per share, including discontinued operations. First-quarter sales are expected to decrease more than 12 percent to $485 million from $554 million a year earlier.

Looking down the road, the company said it expects net sales of $2 billion for fiscal 2006, compared with an estimated $2.07 billion for fiscal 2005.

Johnson Outdoors posts $1.1 million net loss
Johnson Outdoors (Nasdaq: JOUT) reported a wider net loss and slightly lower sales for its first quarter, citing a historic slump during the period. It posted a net loss of $1.1 million, or $0.12 a share, compared with a net loss of $1 million, also $0.12 a share, in the comparable period last year.

Net sales fell 3 percent to $72.6 million from $75 million in the year-ago quarter. Excluding an anticipated $4.6 million revenue drop in military tent sales, Johnson Outdoors said its sales would have increased by $2.2 million.

Johnson Outdoors said in a statement that quarterly sales are historically lowest during the first fiscal quarter when it is ramping up for the primary selling period of its seasonal outdoor recreation products. According to the company, among the key changes were: watercraft continuing its positive momentum with sales 2 percent ahead of last year’s first quarter due to the favorable reception of new products; marine electronics had an 8 percent increase in quarterly sales due primarily to the continued growth of Humminbird, and the acquisition of Cannon and Bottomline brands which added $1.2 million in sales to the division during the period; and outdoor equipment revenues decreased 23 percent due entirely to a 29 percent decline in military sales from the prior year quarter.

Total company operating loss of $800,000 in the first quarter compared unfavorably to an operating loss of $100,000 in the prior year quarter. The company said the higher loss was from the significant drop in military sales compared with the prior year quarter, resulting in a $1.8 million decline in outdoor equipment operating profits, and increased spending in R&D and marketing in marine electronics, which has now fully integrated the Cannon and Bottomline brands.

Johnson Outdoors’ debt to total capitalization stood at 29 percent at the end of the quarter versus 25 percent in 2004. Debt, net of cash, was $20.6 million at the end of this quarter versus $19.8 million in the prior year quarter. Depreciation and amortization was $2.2 million year-to-date, slightly lower than last year’s $2.6 million in the first quarter. Capital spending totaled $1.5 million in the quarter compared with $1.7 million in the same period last year.

Deckers CFO leaving company
Deckers Outdoor Corp. (Nasdaq: DECK) said that Chief Financial Officer Scott Ash will be leaving the company in early March to pursue other interests. A search for his successor is underway and Ash intends to be involved in the transition process, the company said.

Hibbett reports record sales in Q4
For the fourth quarter, Hibbett Sporting Goods’ (Nasdaq: HIBB) net sales increased 12.8 percent to $120.8 million, a new company record, compared with net sales of $107.1 million for the previous year. Comparable store sales for the fourth quarter increased 2.5 percent over the prior-year period.

For the 52-week fiscal year ended Jan. 28, 2006, net sales increased 16.6 percent to $440.3 million, compared with $377.5 million for the 52-week period ended January 29, 2005. Comparable store sales for the year increased 5.6 percent over the prior-year period.

For the quarter, Hibbett opened a net of 23 new stores. For the year, it opened a net of 67 new stores, bringing the total to 549 stores in 22 states. Hibbett said it expects to open a net of approximately 80 to 85 new stores in fiscal 2007.

Reebok and adidas clear final hurdles in acquisition
Reebok shareholders overwhelmingly voted in favor of the sale of the company to adidas for $3.8 billion — a deal that seeks to challenge Nike’s market leadership. The deal will create a company with combined annual sales of nearly $12 billion.

Reebok said more than 98 percent of the votes were cast in favor of the transaction. Adidas’ price would give Reebok shareholders a 34 percent premium over Reebok’s share price before the deal was announced.

Reebok shareholders’ approval was the final hurdle for a deal that won European Union regulatory approval the day before. U.S. regulators did not raise any antitrust objections after Reebok and adidas announced the friendly takeover on Aug. 3.

The companies now expect to close the deal by Jan. 31. Reebok said it had been hoping for a speedy conclusion in part because the company acknowledged three months ago that uncertainty surrounding the deal and the companies’ integration plans had hurt sales and orders to retailers.

Sportsman’s Guide ’05 guidance on track
The Sportsman’s Guide (Nasdaq:SGDE) said that it expects to hit its numbers for the 2005 fiscal year.

For 2005, the company expects consolidated net sales of approximately $285 million and diluted earnings per share in the range of $1.37 to $1.38. This would compare with total year 2004 results of $232.5 million in net sales and earnings of $0.95 per diluted share.

For the 2005 fourth quarter, the company also expects record results, with consolidated net sales of approximately $95 million and fully diluted earnings per share of $0.53 to $0.54.

The Sportsman’s Guide expects to announce the final results for the year at the end of February or in early March, following the completion of the annual audit.

Liz Claiborne implements CEO succession process
Prana’s new parent Liz Claiborne (NYSE: LIZ) announced that Paul Charron, the company’s chairman and CEO, plans to retire at the end of 2006 when his current contract expires. Charron, 63, has served as CEO since 1995 and chairman since 1996. The company’s board has started a process to identify a successor, and will consider both internal and external candidates. It has retained Spencer Stuart to assist in the process.

The company also promoted Executive Vice President Trudy Sullivan to president. In that role Sullivan will have expanded global responsibility for the business lines and myriad brands in the Company’s portfolio.

Separately, Liz Claiborne’s board declared a regular cash dividend on the company’s Common Stock at the rate of $0.05625 per share to be paid on March 15, 2006, to stockholders of record at the close of business on Feb. 24, 2006.

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