Outdoor financials: Wolverine's Q2 profit grows, plus Johnson Outdoors, Gander Mountain, Cabela's, Big 5, Zappos.com, West Marine

Wolverine’s Q2 profit grows
Wolverine World Wide’s (NYSE: WWW) second-quarter profit rose 9 percent, boosted by stronger sales of its Merrell and other branded shoes.

Net income for the quarter ended June 16 rose to $15.5 million, or $0.28 per share, from $14.2 million, or $0.25 per share. Revenue rose 5 percent $250.3 million from $238.5 million.

Wolverine said planned decreases in the military contract and private-label businesses offset revenue gains in branded footwear including Heritage Brands and Hush Puppies.

Gross margin of 38.2 percent improved 30 basis points over the second quarter of 2006, and selling and administrative expense as a percentage of revenue was reduced 10 basis points, reflecting tighter expense control, the company said.

Based on its strong operating results to date, the company reported that it is increasing its profit estimates for the year. It now expects to earn $1.60 to $1.64 per share, up from a prior range of $1.57 to $1.63 per share. It also said it expects its 2007 revenue to be at the lower end of its previously announced range of $1.2 billion to $1.23 billion.

Wolverine said its order backlog at the end of the second quarter was up more than 6 percent compared with the second quarter of 2006.

Additionally, Wolverine said it will pay a 9 cent dividend for its second quarter on Nov. 1 to shareholders of record as of Oct. 1. The dividend is even with the payment made for the last quarter.

Wolverine’s portfolio includes the Merrell footwear and apparel, Sebago and Wolverine brands and the Patagonia footwear license.

Johnson Outdoors to pay $4.4 million in settlement; tapped for military contract
Johnson Outdoors (Nasdaq: JOUT) will pay $4.4 million to settle an intellectual property dispute with competitor Confluence Holdings.

“After weighing the costs, risks and business distractions associated with continued litigation of this matter against the potential benefit, it became clear that it was in the financial best interests of the company and its shareholders to settle and move on,” said David W. Johnson, Vice President and Chief Financial Officer.

Johnson Outdoors said other terms of the settlement, which does not include an admission of wrongdoing, will remain confidential. The company expects the settlement to reduce fiscal third-quarter earnings. It added that it has made a claim for recovery with its insurance company, but it does not expect a resolution in fiscal 2007.

In other company news: Johnson Outdoors, along with seven other unrelated vendors, said it has been tapped for a contract covering a variety of military shelters, trailers and other military supply components. This marks the third year of the contract, originally announced in September 2005, under which total combined orders could range from a minimum value of $25,000 to a maximum cumulative total value of $96 million across all eight vendors combined. No orders have been placed with Johnson Outdoors under the renewed contract.

In 2005, Johnson Outdoors was named one of the multiple vendors eligible to share in the single contract consolidating military purchases for a variety of goods for all branches of service. Under the first two years of the contract, the company has received orders totaling $31.4 million.

Gander Mountain wins trademark ruling against Cabela’s
Cabela’s (NYSE: CAB) may soon face a new catalog and online competitor because rival Gander Mountain (Nasdaq: GMTN) won the right to use its own trademarks again in direct marketing.

A federal judge in Minnesota ruled in Gander Mountain’s favor in the latest round of the logo and trademark dispute between the two companies. So Gander Mountain announced plans to launch an online store and resurrect its catalog as soon as is practical.

Cabela’s said in a statement that the company believes the judge’s ruling contradicts a 1996 agreement between the two companies. It added that it has not decided whether to appeal.

Gander Mountain hasn’t been able to use its brand to market its hunting, fishing and camping products directly to consumers outside of its stores since 1996. That’s when Gander’s predecessor company sold a short-term trademark license and its direct-marketing division to Cabela’s for $35 million. Also included in the sale was a seven-year non-compete clause that led to litigation between the two firms, but has since expired.

Gander Mountain filed for bankruptcy in 1996, and Holiday Cos. bought its stores. The chain went public in 2004 and expanded.

Gander Mountain buying inventory of Reeds store
Gander Mountain (Nasdaq: GMTN) said it is buying the inventory and certain assets of Reeds Family Outdoor Outfitters super store in Baxter, Minn. Financial terms of the deal were not disclosed. The transaction is expected to be complete in September.

Gander, which has its own store in Baxter, and Reeds will continue daily operations at their respective Baxter locations until September. Reeds’ inventory will then be integrated into Gander’s Baxter store.

“Gander Mountain opened our Baxter store in 2005, and while we have been pleased with the business, we believe the Brainerd Lakes area could be better served by one store with the quantity and quality of service and inventory that our store and the Reeds store are both offering,” Gander President and CEO Mark Baker said in a statement.

Reeds will continue to operate a store in Walker, Minn., an online store, catalog businesses and other retail locations in the future. Some of Reeds’ Baxter staff is expected to join Gander, while others will move to Reeds’ Walker store.

Big 5 cuts Q2 forecast due to weaker same-store sales
Big 5 Sporting Goods (Nasdaq: BGFV) lowered its second-quarter earnings forecast after sales came in at the lower end of the retailer’s target range.

The company now expects earnings between $0.23 and $0.26 per share in the quarter ended July 1. That is down from a previous range of $0.25 to $0.33 per share.

Big 5 said second-quarter same-store sales fell 0.2 percent, the first quarterly decline in more than 11 years. Total sales in the period climbed 2.9 percent to $217.8 million from $211.8 million last year.

The company plans to report second-quarter results in the first week of August.

Shares fell $1.26, or 5 percent, to $24.01 in afternoon trading on July 12.

In other company news: Michael Miller, a director with retailer Big 5, sold 10,000 shares of common stock under a prearranged trading plan. In a Form 4 filed with the SEC, Miller reported he sold the shares July 9-10 for $25.10 to $25.30 apiece.

The stock sale was conducted under a prearranged 10b5-1 trading plan which allows a company insider to set up a program in advance for such transactions and proceed with them even if he or she comes into possession of material nonpublic information.

Insiders file Form 4s with the SEC to report transactions in their companies’ shares. Open market purchases and sales must be reported within two business days of the transaction.

Zappos.com buys eBags’ 6pm.com division
Online shoe retailer Zappos.com has signed a definitive agreement to purchase the assets of 6pm.com from eBags Inc., the Denver-based online retailer of luggage and bags. Terms of the transaction were not disclosed. The deal is expected to close within three months.

6pm.com, formerly Shoedini.com, is an online footwear and accessory source that delivers a fun and interactive shopping experience, according to a company statement. Additionally, eBags said 6pm.com quadrupled in size during the three years it owned the website

West Marine’s Q2 sales drop 6.3 percent
West Marine (Nasdaq: WMAR), a supplier of boating supplies and accessories, said same-store sales for its second quarter ended June 30 fell 2.9 percent.

Net sales for the quarter fell 6.3 percent to $247.8 million.

“As was described in our earnings guidance on June 26, sales results during the peak part of the season reflected lower than expected levels of boating activity and were disappointing,” Peter Harris, West Marine’s CEO, said in a statement. “The softness was particularly evident in Florida. Also, sales of higher-priced discretionary items have been weak, and in-store traffic levels, which we believe reflect boat usage, have been lower than expected.”

Cabela’s hires senior VP of real estate development
Cabela’s (NYSE: CAB) has appointed Lynn P. Ferguson as senior vice president of retail strategy and real estate development, a new position. In this role, he will report to Cabela’s CEO Dennis Highby, and be responsible for Cabela’s retail store expansion plans and retail strategy.

Ferguson was most recently the chief marketing officer and executive vice president of National Recreational Properties, a direct-to-consumer real estate and financial company. He previously served in senior retail and marketing positions with Tower Records, Charles Schwab and Walt Disney. He began his career in retail development with Hewlett-Packard and as the founder of PAC West Design.

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