Outdoor financials: Wolverine FY revenue exceeds billion-dollar mark for first time, plus VF Corp., Sport Chalet, Timberland, Amer Sports, Oakley, CamelBak, Wellman, LaCrosse
Outdoor financials: Wolverine FY revenue exceeds the billion-dollar mark for the first time; VF's outdoor business revenue jumps 23 percent; Sport Chalet's same-store sales slide due to lower winter sales; Timberland reports modest growth in fourth-quarter earnings; Amer's quarter gets a boost from the acquisition of Salomon; Oakley buys Oliver Peoples; CamelBak acquires Southwest Motorsports; Wellman declares a quarterly dividend; and LaCrosse reports its Q4 and FY earnings.
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Wolverine FY revenue exceeds billion-dollar mark for first time
Wolverine World Wide (NYSE: WWW) said its fourth-quarter profit declined, hit by a tax expense after the company converted foreign income into dollars. Among its many brands, Wolverine is the parent of Merrell and holds the Patagonia Footwear license.
For its fourth quarter, Wolverine reported net income of $20.4 million, or $0.36 per share, compared with a prior-year profit of $20.7 million, or $0.34 per share. Revenue was $321 million, up 4.4 percent from $307.6 million.
The quarter’s results include a tax expense after Wolverine converted $41.5 million of foreign earnings under the American Jobs Creation Act of 2004, a law allowing U.S. companies to repatriate overseas income under a lower tax rate. The tax expense reduced profit by $0.02 per share.
Wolverine achieved record revenue totaling $1.061 billion for its 2005 fiscal year, a 7.0 percent increase over 2004 revenue of $991.9 million. Fiscal 2005 earnings per share grew to a record $1.27, which reflected a 16.5 percent increase over the $1.09 reported in 2004 and exceeded the company’s earnings per share estimate previously announced in December.
“We are very pleased to report the company’s strong financial performance in 2005, highlighted by Wolverine World Wide crossing the $1.0 billion mark in revenue for the first time in the company’s 123-year history,” said Timothy J. O’Donovan, the company’s Chairman and CEO, in a statement. ” Our business model, which leverages our strong portfolio of global brands, continues to drive consistent growth and exceptional earnings performance.”
Wolverine also backed its full-year financial forecast calling for earnings between $1.34 to $1.40 per share, on revenue between $1.11 and $1.13 billion. The outlook includes investments in two new growth initiatives, Merrell Apparel and Patagonia Footwear, and expected stock options expense, which will reduce profit by about $0.04 per share.
VF’s outdoor business revenue jumps 23 percent
Bolstered by its Outdoor Coalition, VF Corp. (NYSE: VFC) had a record-setting fourth-quarter net income of $127.5 million from $125.3 million, with earnings per share rising to $1.13 from $1.10. Earnings per share in the latest quarter included 3 cents for the expensing of stock options.
Total revenue increased 4.2 percent to $1.65 billion from $1.58 billion, with sales income up 4.3 percent and royalty income up 2.5 percent. Analysts were expecting VF to earn $1.14 per share â€” excluding stock-options costs â€” on sales of $1.59 billion.
For the year, income rose to $506.7 million from $474.7 million, and earnings per share climbed to $4.44 from $4.21. Total revenue in 2005 rose 6 percent to $6.5 billion from $6.12 billion in 2004.
VF said its Outdoor Coalition continues to be the primary driver of the company’s top line growth. Total revenues increased 23 percent to $343.9 million in the quarter from $279.9 million in last year’s period, driven by growth across nearly all its outdoor brands.
The North Face brand continued to grow revenues in excess of 20 percent both in the United States and internationally. Its Kipling brand continued to grow in Europe, while total revenues of its packs business rose 13 percent, driven by higher JanSport brand sales in the United States. The strong volume gains achieved by The North Face and profit improvements in Vans contributed to a 45 percent increase in operating income in the quarter, with total outdoor operating margins increasing 12.0 percent to 14.2 percent.
VF said it still expects 2006 organic revenue growth of 4 percent to 5 percent and growth in earnings per share of about 6 percent to 8 percent. The guidance assumes double-digit growth in outdoor and mid-single digit growth in sportswear and imagewear, with stable revenue in VF’s jeanswear and intimates coalitions.
In addition, the company’s board set a buyback plan of 10 million shares.
Sport Chalet’s same-store sales slide on lower winter sales
Third-quarter sales for Sport Chalet (Nasdaq: SPCHA and SPCHB) increased 3.7 percent from $96.1 million to $99.7 million last year, with sales from six new stores contributing $5.4 million, or 5.5 percent of the increase.
Same-store sales decreased 1.8 percent for the quarter, following last year’s record winter weather conditions, which had increased customer traffic. Excluding winter-related merchandise, same-store sales increased 3.0 percent for the quarter, following a 3.4 percent increase for the same quarter last year.
Gross profit decreased as a percent of sales from 32.5 percent to 31.9 percent for the same period this year because of higher rent expenses for new stores opened during the quarter, the company said. Selling, general and administrative expenses increased as a percent of sales from 25.9 percent in the third quarter of fiscal 2005 to 26.5 percent in the third quarter of fiscal 2006. The increase is related to greater advertising expenses for the holiday season and new store openings.
Net income for the quarter was down to $3.0 million, or $0.22 per diluted share, from last year’s $3.7 million, or $0.26 per diluted share.
During the third quarter, Sport Chalet expanded into its third state with the opening of three stores in Arizona, and opened its 40th store in South Orange County, Calif. It anticipates opening four to eight stores in fiscal 2007.
Lastly, Sport Chalet also announced the following management promotions: Steve Belardi, vice president – logistics; Jason Gautereaux, vice president – inventory; Ted Jackson, vice president – IT and chief information officer; and Linda Obermeyer, vice president – merchandising.
Timberland reports modest growth in fourth-quarter earnings
While Timberland’s (NYSE: TBL) fourth-quarter profit climbed thanks to higher worldwide men’s and kid’s shoe sales, its women’s footwear was down.
The company earned $46.9 million, or $0.71 per share, up 4.1 percent from $45 million, or $0.64 per share, during the same period a year earlier. Without pretax restructuring charges of $1.7 million, the company earned $0.73 per share.
Sales edged up 2.3 percent to $465.3 million from last year’s $454.7 million, driven by gains in both U.S. and international markets. Analysts, on average, were looking for earnings of $0.62 per share on sales of $456.6 million.
U.S. revenues grew 2.6 percent as gains in kids’, men’s casual and Timberland PRO series footwear and men’s apparel sales offset anticipated decreases in women’s casual footwear and boot sales, the company said. International results (+1.7 percent or +8.2 percent in constant dollars) were driven by strong constant dollar sales gains in Europe and Asia in both footwear and apparel. Foreign exchange rate changes reduced fourth-quarter 2005 revenue by $9.6 million or 2.2 percent.
Timberland added that fourth-quarter results were supported by global gains in both footwear and apparel. Global footwear revenues grew 1.4 percent to $357.5 million, driven by growth in kids’, men’s casual and Timberland PRO series categories. Apparel and accessories revenue increased 5.4 percent to $103.2 million, reflecting gains in both U.S. and international markets.
For the full year, the company earned $164.6 million, or $2.43 per share, up 7.8 percent from $152.7 million, or $2.14 per share, a year earlier. Sales rose 4.3 percent to $1.57 billion from the prior year’s $1.5 billion.
For 2006, Timberland said it expects moderate declines in earnings per share and mid single-digit sales growth. The company said its outlook reflects anticipated pressure on gross margins in 2006, driven by product mix changes as well as higher fuel costs.
Timberland said it is planning for high single-digit growth in operating costs, driven by investments and stock option expenses. The company added that it expects these costs to be felt more in the first half of the year. With relatively flat growth in the first half of the year and likely first-quarter sales declines, Timberland said it expects earnings to decline during that period.
Separately, Timberland’s board has authorized the repurchase of up to an additional 6 million shares of its Class A shares. The program is in addition to its current share buyback plan, which had some 1.5 million shares outstanding as of Dec. 31.
Amer’s quarter gets boost from Salomon acquisition
Overall for Finland’s Amer Sports (AMEAS.HE) and its seven divisions, net sales grew 32 percent to Euro 1,363.7 million (USD $1.624.3 million). The acquisition of Salomon from adidas earlier this year increased net sales by 25 percent. Organic net sales growth exclusive of Salomon was 7 percent.
“Amer Sports is now the market leader by a good margin in the world of sporting goods equipment,” said CEO Roger Talermo. “We have now reached this important target that we set for ourselves a few years ago. New, more ambitious targets must now be put forward.”
Looking ahead, for 2006, Amer Sports’ net sales were expected to be Euro 1.8 billion (USD $2.144 billion), with Salomon being included in the figures during the entire year (pro forma 2005: Euro 1,732 million (USD $2.063 million). Earnings per share in 2006 are expected to come in at Euro 0.90-1.05 (USD $1.07-$1.25).
“Demand for sports equipment was good in 2005,” the company stated in its report. “The company estimates that the trend in demand for sports equipment will be steady in 2006.”
(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 Feb. 10.)
Oakley buys Oliver Peoples
After disappointing fourth-quarter results where the company said it plans to refocus on its core business of sunglasses and other eyewear products, Oakley (NYSE: OO) said it has acquired privately held luxury eyewear maker Oliver Peoples for $55.7 million. The price includes $5 million in debt and up to $4 million in incentives.
The company, which includes the Oliver Peoples, Mosley Tribes and licensed Paul Smith eyewear brands, will remain based in Los Angeles as a subsidiary. Co-founder Larry Leight will stay onboard as CEO and chief designer.
Oakley posted fourth-quarter net income of $9.2 million, or $0.13 per share, down from $10.0 million, or $0.15 per share, a year earlier, when Oakley benefited from new product launches and a lower tax rate. Quarterly sales rose 6.2 percent to $162.4 million.
Oakley CEO Scott Olivet said the renewed focus on the eyewear business, a scale-back in apparel and the exit from a significant portion of its footwear line would lead to more consistent results for the company. The company plans to invest more heavily in prescription eyewear, continue to develop electronic eyewear and launch its first line of glasses for women in March, followed by goggles for women.
Olivet said in a statement that the acquisition of Oliver Peoples is “a tremendous start in the creation of a targeted portfolio of brands,” and its position in the fashion eyewear market complements Oakley’s leadership in sport performance and active eyewear.
CamelBak acquires Southwest Motorsports
In an effort to grow its position in the tactical marketplace, CamelBak Products has acquired Southwest Motorsports Enterprises, a tactical glove manufacturer.
Headquartered in Phoenix, Ariz., Southwest Motorsports has been one of the U.S. military’s top manufacturers of form-fitting gloves for tactical and combat applications since 1994. Martina Hutchinson, Southwest Motorsports founder and president, took design ideas from the automotive marketplace and leveraged them into a successful business catering to militaries around the world. Hutchinson will now lead and expand CamelBak’s tactical glove business as vice president of protection products.
CamelBak said its extensive U.S. and foreign production capabilities will help meet increasing sales requirements for the U.S. government and armed services. In August 2004, Southwest Motorsports was awarded a $7.1 million contract to produce combat gloves for the U.S. Army.
Wellman declares quarterly dividend
Wellman’s board of directors (NYSE: WLM) declared a quarterly dividend of $0.05 per share on the outstanding shares of the company’s common stock. This dividend is payable on March 15, 2006, to stockholders of record as of the close of business on March 1, 2006.
LaCrosse reports Q4 and FY earnings
LaCrosse Footwear’s (Nasdaq: BOOT) sales to the outdoor market were $14.2 million for the fourth quarter and $48.9 million for the full year of 2005, up 9 percent from $13.0 million and $44.8 million, respectively, for the same periods of 2004. The company said the growth in outdoor sales reflects its successful introduction of innovative products and continued penetration into the hunting boot market.
For the fourth quarter of 2005, LaCrosse reported consolidated net sales of $29.7 million, up 4 percent from $28.7 million in the fourth quarter of 2004. Sales in 2004 included General Services Administration (GSA) delivery orders for uniform boots, which was not part of an ongoing contract, and the former PVC boot line (PVC). Excluding sales of $2.2 million from GSA delivery orders and $300,000 from PVC in the fourth quarter of 2004, consolidated net sales grew 14 percent year-over-year in the same period of 2005. For the full year 2005, net sales were $99.4 million, compared to $105.5 million in 2004. Excluding sales of $9.8 million from GSA delivery orders and $5.1 million from PVC in the full year 2004, consolidated net sales grew 10 percent during 2005.
Income before taxes was $3.3 million in the fourth quarter of 2005, up 27 percent from $2.6 million in the same period of 2004. For the full year 2005, income before taxes was $8.3 million, up 15 percent from $7.2 million in 2004. Net income was $2.0 million, or $0.33 per share in the fourth quarter, compared to $2.2 million, or $0.37 per share in 2004. For the full year 2005, net income was $5.2 million, or $0.85 per share, compared to $7.0 million, or $1.15 per share in 2004.
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