NEW YORK — Strong sales gains from newer merchandise categories and retail operations more than offset waning sunglass sales to propel Oakley Inc. to double-digit profit growth in the third quarter.
For the three months ended Sept. 30, the Foothill Ranch, Calif.-based sunglasses and accessories marketer said net income rose 10.3 percent to $13.5 million, or 20 cents a diluted share. That compares with last year’s earnings of $12.3 million, or 18 cents. Earnings per share missed the Wall Street consensus estimate by a penny.
Net sales for the quarter grew a commensurate 9.9 percent to $145 million from $131.9 million a year ago, as a 60 basis-point expansion in gross margin was negated by a 60 basis-point increase in operating expenses.
Oakley’s shares fell 2.9 percent, or 31 cents, to close at $10.35 in Thursday’s New York Stock Exchange session.
“Sunglass sales declined during the third quarter as many of our sunglass styles struggled to achieve the momentum we anticipated,” said chief operating officer Link Newcomb in a statement.
“Many U.S. retailers, including Sunglass Hut, entered the third quarter with higher inventory levels than planned due to the disruption in the early summer selling season caused by poor spring weather. International sunglass sales were also weaker than expected in southern European markets, where we continued to experience strong competition from fashion brands; In Japan, where the retail environment continued to be soft, and in the South Pacific region, where an acquisition involving our two largest customers caused what we believe to be a temporary disruption.”
Although global sunglass sales declined 9.6 percent to $77.7 million, that was more than offset by better sales of apparel, footwear, watches and other merchandise, which improved 31.9 percent to $50.6 million. Sales of merchandise other than sunglasses accounted for 32.6 percent of total revenues.
The company’s signature stores also contributed to the better top-line results, chipping in a better-than-expected $15 million, a 75.9 percent increase over the prior-year level.
Overall, for the first nine months of the fiscal year, Oakley saw profits fall 12.9 percent to $35 million, or 51 cents a diluted share. Net sales climbed 3.5 percent to $400 million.Addressing its full-year forecast, Oakley said it now anticipates earnings to finish at the low end of its previous guidance of 55 to 60 cents. For fiscal 2004, the firm said earnings are expected to increase 15 to 20 percent on net sales growth of about 10 percent.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews