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4Q sales for VF’s outdoor division jump 87 percent
Net income for VF Corp.’s (NYSE: VFC) fourth quarter increased 19 percent on solid sales growth in the company’s core businesses — with its outdoor division posting an 87 percent jump in sales.
VF’s fourth-quarter sales rose 12 percent to $1,559.8 million from $1,387.3 million in the prior year’s fourth quarter. Net income increased 19 percent to $125.3 million from $105.6 million, with earnings per share rising 15 percent to $1.10 from $.96.
Combined sales for VF’s Outdoor Coalition, which includes The North Face, Vans, JanSport, Eastpak, Napapijri and Kipling brands, rose 87 percent in the fourth quarter to $276 million from $148 million. Domestic sales were up 71 percent and international sales were up 121 percent. Recent acquisitions, such as Vans, Napapijiri and Kipling, added $100 million to sales and 1 cent per share to earnings.
Sales of The North Face brand grew by 26 percent in the United States and 48 percent internationally, with growth across most product categories. Spring bookings for the brand are up 25 percent in the United States and 22 percent in Europe.
During the company’s conference call, VF management said The North Face’s international growth is happening for numerous reasons that include “entering most countries, adding retailers, and adding new categories like footwear and sportswear. Growth is on all cylinders.”
Management added during the earnings call that the Outdoor Coalition is the strongest category among all VF’s divisions. The company is forecasting low- to mid-single-digit growth in each business except Outdoor, where sales growth could exceed 25 percent.
VF’s FY2004 sales increased 16 percent to $6,054.5 million from $5,207.5 million. Net income rose 19 percent to $474.7 million from $397.9 million, with earnings per share rising 17 percent to $4.21 from $3.61. Acquisitions made during 2004 benefited sales and earnings per share by $296 million and $.14, respectively. The Outdoor Coalition had the highest sales increase — 73 percent — generating $1,003.8 million for the year.
The board of directors declared a regular quarterly cash dividend of $0.27 per share, payable on March 21, 2005, to shareholders of record on March 11, 2005.
Johnson Outdoors 2005 1Q hit by winter blues
Johnson Outdoors (Nasdaq: JOUT) rode the seesaw of good and bad as operating profits in its marine electronics and outdoor equipment businesses were offset by losses in its watercraft and diving businesses for its 2005 first quarter. A classic scenario for some outdoor manufacturers, Johnson noted that, due to the seasonality of its markets, quarterly net sales are historically slower during the first and fourth fiscal quarters.
Johnson reported a net loss for the first quarter of $1.0 million or $0.12 per diluted share compared with net income of $0.2 million or $.02 per diluted share in the comparable period last year.
Total company net sales increased by 19.1 percent for the quarter to $75 million from last year’s $63 million, driven by the marine electronics and outdoor equipment business units. While net sales in marine electronics increased by 54.7 percent over the same period last year, driven primarily by the Humminbird brand acquired in May 2004, operating profit for the unit declined due to unfavorable volume variances in the Minn Kota product line.
The Eureka! tent line was the main reason the outdoor equipment generated a 19.3 percent increase in net sales and a 37.4 percent improvement in operating profit over the same period in the prior year because of military tent sales. Unfortunately, the company expects military tent sales to decline up to 40 percent from the prior year as current contracts and orders come to an end, and the timing for decisions on future government contracts remains unpredictable. Its watercraft division, which includes Old Town, Necky kayaks and Ocean Kayak, posted a slight decline in net sales while also reducing operating losses versus the first fiscal quarter of 2004.
Also hitting the bottom line are charges related to the company’s attempts to go private — which is still not finalized — adding $900,000 to operating expenses for the quarter. That brings the total charges to $2.4 million since February 2004. Operating expenses for the quarter were also impacted by currency ($700,000), watercraft restructuring ($500,000) and the addition of the Humminbird business ($2.5 million).
U.S. and international gains vault Timberland’s 4Q and FY04 numbers
The Timberland Company (NYSE: TBL) had record results for its fourth quarter and full year with gains from its footwear business in the U.S. and international markets.
With double-digit revenue gains, significant improvement in operating margin and strong cash flow generation, Timberland reported record fourth-quarter net income of $45.0 million and diluted earnings per share of $1.29, compared with 2003’s net income of $39.5 million and diluted earnings per share of $1.10. Fourth-quarter revenue increased 9.4 percent to $454.7 million, driven by gains in both U.S. and international markets.
By business, U.S. revenue increased 5.2 percent, reflecting growth of 5.2 percent in Timberland’s wholesale channel and 5.3 percent in the company’s retail stores. Same-store sales, or sales in stores open at least a year, rose 3.6 percent from the 2003 fourth quarter, Timberland said. Fourth-quarter results were supported by strong global footwear sales. Global footwear revenues expanded 10.0 percent to $352.3 million, driven by growth in boots, kids’ and Timberland PRO Series categories. Global apparel and accessories revenue grew 7.5 percent to $97.9 million, reflecting gains in international markets. Timberland ended the quarter with $309.1 million in cash and no debt outstanding.
For the full year, Timberland posted revenue of $1,500.6 million (+11.8 percent versus prior year, or +8.2 percent in constant dollars) and operating profit of $233.9 million (+26.9 percent versus prior year) — both records for the company. Timberland said disciplined asset management enabled it to generate $184.7 million in net operating cash flow.
Same-store sales boost Sport Chalet’s 3Q
Eight new stores and high store sales helped Sport Chalet (Nasdaq: SPCH) increase its third-quarter sales 20.3 percent from $79.7 million for the quarter ended Dec. 31, 2003, to $95.9 million for the same quarter this year. Same-store sales increased 6.8 percent. Its gross profit margin decreased slightly from 32.6 percent for the quarter ended Dec. 31, 2003, to 32.5 percent for the same quarter this year. Selling, general and administrative expenses, as a percentage of sales, went down to 25.7 percent from 2003’s 26.1 percent. The retailer said it was a result of the efficiencies created by the increase in same-store sales and reduced workers’ compensation expense partially offset by the costs associated with new stores. Net income increased $714,000, or 23.2 percent, from $3.1 million, or $0.44 per diluted share, in the third quarter last year to $3.8 million, or $0.53 per diluted share, for the same quarter this year. Sport Chalet is also focusing on expansion into Arizona with three stores planned for Phoenix, Chandler and Scottsdale.
Merrell top earner for Wolverine in 2004
Wolverine World Wide (NYSE: WWW) declared Merrell its top earnings producer for 2004, achieving strong double-digit sales gains and helping the company break its revenue record. For FY2004, Wolverine revenue was $991.9 million, an 11.6 percent increase over 2003 revenue of $888.9 million.
For the fourth quarter of 2004, the company reported revenue of $307.4 million, an 8.7 percent increase over 2003’s $282.8 million. Quarterly income grew to $20.7 million, or 52 cents per share, from $18.6 million, or 46 cents, in the year-ago period. Also for the quarter ended Jan. 1, 2005, earnings per share increased to $0.52, a 13 percent increase over 2003’s earnings per share of $0.46. Earnings per share, on a pre-split basis, for the year grew to $1.64, a 29.1 percent increase over the $1.27 per share reported in 2003. Adjusting for the company’s 3-for-2 stock split, post-split earnings per share for fiscal 2004 and the fourth quarter were $1.09 and $0.34, respectively. After the split, earnings for the latest quarter were 34 cents per share.
“All of our operating groups experienced double- digit profit improvements during the year with the Merrell business leading the way as it achieved strong double-digit sales gains and was the top earnings producer for the business,” Timothy O’Donovan, Wolverine’s president and CEO, said in a statement. “The company’s European initiatives gained further traction with strong double-digit revenue gains as we continued to capitalize on the service advantages of our European infrastructure.”
Continuing its reach in Canada and Europe, it has transitioned the Wolverine Boots and Shoes and CAT Footwear businesses from a distributor model to an owned-wholesale business. It now directly wholesales all of its major brands in Canada. In Europe, it acquired the Merrell distributor businesses in both Sweden and Finland, consistent with its planned strategy of expanding its owned-wholesale operations in the pan-European market. The company said these acquisitions, while relatively limited in scope, leverage existing international resources and provide a foundation for future growth.
For 2005, Wolverine now anticipates earnings to be $1.79 to $1.86 per share — or $1.19 to $1.24 per share post-split — on revenue of $1.04 billion to $1.06 billion. Its prior estimate was for earnings of $1.60 to $1.62 per share and $975 million to $985 million in revenue.
Also, the board of directors declared a quarterly cash dividend of $.065 per share of common stock. The dividend is payable on May 2, 2005, to stockholders of record on April 1, 2005. The dividend is equal to the last quarterly dividend and represents a $.26 per share annual dividend.
LaCrosse reports FY 2004 net income up 165 percent
LaCrosse Footwear (Nasdaq: BOOT), parent of Danner, reported consolidated fourth-quarter net sales of $28.7 million, up 5 percent from $27.3 million in 2003. Consolidated net income for the fourth quarter was $2.2 million, or $0.37 per share, up 96 percent from $1.1 million, or $0.19 per share, last year. For the full year 2004, net sales were $105.5 million, up 10 percent from 2003’s $95.7 million. Consolidated net income for the full year was $7.0 million, or $1.15 per share, up 165 percent from $2.6 million, or $0.44 per share, in 2003.
LaCrosse said it has successfully increased sales of both its outdoor (formerly “recreational”) and work (formerly called “occupational”) footwear. Outdoor sales were $13.0 million for the fourth quarter and $44.8 million for the full year 2004, up from $12.8 million and $43.8 million, respectively, for the same periods in 2003. The growth in outdoor sales for the year included stronger penetration into the outdoor rugged/casual and hunting markets. Work sales were $15.7 million for the fourth quarter and $60.7 million for the full year 2004, up from $14.5 million and $51.9 million, respectively, for the same periods in 2003.
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