Stride Rite's Q3 profit rises on strong sales
Stride Rite Corp. (NYSE: SRR), parent of Saucony and Hind, reported a 10.4 percent increase in third-quarter profit, aided by higher sales.
For the quarter, net income rose to $8.5 million, or $0.23 per share, from $7.7 million, or $0.21 per share, last year. Excluding stock option and acquisition expenses, profit would have been $8.9 million, or $0.24 per share, in the latest quarter. Revenue rose 21 percent to $177.5 million from $146.2 million in the year-earlier period. Sales in stores open at least one year rose 4.1 percent at the Stride Rite retail chain.
Saucony net sales, which include Hind's numbers, were $21.1 million for the third quarter. The results reflect a refocused emphasis on technical in-line product and less promotional business, the company said.
"Saucony continues to enjoy success in the specialty run business. New strong technical product, an updated originals line and a separate children's line have been developed for spring 2007," David Chamberlain, Stride Rite's chairman and CEO, said in a statement.
International net sales increased 119 percent for the third quarter compared to fiscal 2005, due primarily to the addition of Saucony international sales. The company said that the international market offers a significant opportunity for growth and it's investing in its infrastructure in Europe.
Stride Rite reaffirmed full-year earnings guidance of $0.82 to $0.88 per share, excluding the impact of a lower tax rate. The outlook includes $0.05 of stock options expense, $0.04 of sales impact related to the Saucony acquisition, and integration costs of $3.2 million, or $0.05 cents per share.
Coverage initiated on Brunswick and Town Sports
On Sept. 26, both Brunswick Corp (NYSE: BC) and Town Sports International (Nasdaq: CLUB) had coverage initiated on their companies from research firms. Rochdale Securities rated Brunswick as a "buy," while RBC Capital Markets gave Town Sports an "outperform" rating.
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