NEW YORK — Bolstered by double-digit gains in its footwear business as well as 3 percent revenue growth in apparel and accessories, Timberland Co. delivered robust earnings for the fourth quarter ended Dec. 31.
This story first appeared in the February 4, 2004 issue of WWD. Subscribe Today.
Net income for the quarter came in with a 45.5 percent increase, climbing to $39.5 million, or $1.10 a diluted share, from $27.1 million, or 73 cents a share, in the same period last year, while sales rose 16.4 percent to $415.4 million from $357 million.
Wall Street seemed pleased with the results as shares of Timberland ended Tuesday up $3.11, or 6.14 percent, from the prior close to $53.74.
Aside from stellar sales and earnings, the company also posted significant gross margin gains, which were driven by favorable currency exchange rates and an improved supply chain.
Brian McKeon, chief financial officer, said in a conference call to investors that the gross margin “benefited from strong supply chain execution” that resulted in “lower product-related costs, lower impacts from off-price sales and lower product returns.
“Foreign exchange also added approximately 70 basis points to gross margin, and contributed $3 million to operating profit for the quarter,” he added.
By segment, the company’s global footwear business grew 20.7 percent in the fourth quarter while global apparel and accessories experienced a sales gain of 3 percent, which was “driven by gains in the company’s Asian business.” The company said sales in the apparel and accessories segment were offset by declines in European apparel, which were due to a tougher year-over-year comparison.
For the year-end period, net income rose 23.9 percent to $117.9 million, or $3.23 a share, from $95.1 million, or $2.36 a share, in the prior period, while sales climbed 18 percent to $1.34 billion from $1.19 billion.
“Financial results in 2004 will benefit from recent trends strengthening exchange rates for foreign currencies relative to the U.S. dollar,” McKeon said on the conference call.