Outdoor financials: Columbia Sportswear Q2 net down 24 percent, plus Deckers, Timberland, Liz Claiborne/Prana, K2, Coleman, Rocky Brands, Zappos, GSI, Wellman

Columbia Sportswear Q2 net down 24 percent, Deckers Outdoor Q2 profit flat, Timberland posts 2Q loss, Q2 profit falls for Prana parent, K2 posts higher second-quarter profit, Coleman parent posts 28 percent increase in Q2 revenue, Rocky Brands reports Q2 sales and profit losses, Zappos online shoe seller says it's close to $600 million goal, GSI Commerce reports Q2 loss, and Wellman posts narrower loss.
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Columbia Sportswear Q2 net down 24 percent
Columbia Sportswear (Nasdaq: COLM), parent of Mountain Hardwear and Montrail, said second-quarter earnings fell 24 percent on higher operating costs, but results still topped analyst expectations.

Net income slid to $4.8 million, or $0.13 per share, from $6.3 million, or $0.16 per share in the year-ago period. On average, analysts had forecast earnings of $0.04 per share. Net sales increased nearly 14 percent to $211.6 million from $186.2 million last year, fueled by a 25 percent increase in international sales. Analyst sales expectations were $206.5 million.

During the quarter, sportswear sales rose 9.6 percent to $112.2 million, footwear sales increased 25.9 percent to $43.2 million, and outerwear sales increased 8 percent to $43.2 million.

"The stronger than projected sales and margins, coupled with effective cost management drove better than expected results for the quarter," Columbia's President and CEO Tim Boyle said in a statement.

He warned, though, that the second quarter is the company's smallest revenue period of the year, and because of that, changes in shipments in any one channel, geography or category may be amplified. "Therefore, changes in operating results may not necessarily be indicative of future results," Boyle added.

Looking ahead, Columbia sees third-quarter net income down about 12 percent and third-quarter revenue growth of 11 percent to 12 percent. For 2006, Columbia anticipates earnings per share of up to about $3.22, on net sales growth of about 11 percent.

Deckers Outdoor Q2 profit flat

Deckers Outdoor Corp. (Nasdaq: DECK) reported flat second-quarter profit, with Teva sales down slightly and Ugg and Simple up by double-digit percentages.

The company posted earnings of $2.7 million, or $0.21 per share -- flat with the year-ago quarter. Sales edged 3 percent higher to $41.7 million from $40.3 million a year ago. Deckers had expected earnings in a range of $0.03 to $0.05 per share and sales of $38 million to $40 million. Analysts forecast profit and revenue at the high end of the company's projections.

Sales of its Teva-brand sandals fell to $22.8 million from $24.8 million a year ago. Sales of Ugg boots jumped 19 percent to $15.9 million, while its Simple-brand casual footwear sales grew 40 percent to $3 million.

For the year, Deckers is forecasting sales of $272 million to $278 million, up from a high-end estimate of $276 million. Earnings should range from $2.39 to $2.45 per share, up from a previous best-case estimate of $2.29.

For the third quarter, Deckers said it expects sales of $71 million to $74 million, and earnings of $0.51 to $0.54 per share. Analysts expect third-quarter sales of $74.1 million and profit of $0.68 per share.

Timberland posts 2Q loss

Lower U.S. boot sales contributed to a second-quarter loss for Timberland (NYSE: TBL) -- a loss of $13 million, or $0.21 per share, versus a prior-year profit of $6.3 million, or $0.09 per share.

Revenue was also down by 6 percent to $226.6 million from $240.3 million in the year earlier period. Analysts had expected a loss of $0.20 per share on sales of $228.4 million.

Global footwear sales slid 15.1 percent to $150.8 million, as lower sales of boots and kids' shoes masked stronger Pro series and men's casual footwear sales. Domestic sales fell 10.9 percent.

The company said 2006 earnings per share would decline in the 25 percent range, a figure at the lower end of its previous forecast. Sales are expected to increase in the low single-digit range. For the third quarter, Timberland forecast flat revenue growth and gross margin down 4 percent. It also predicted higher costs in the current quarter as it spends more on global expansion and growth strategies.

Q2 profit falls for Prana parent
Second-quarter profit dropped for Liz Claiborne (NYSE: LIZ), reportedly hampered by weaker wholesale apparel sales and higher selling, general and administrative expenses and borrowing costs. The parent company of Prana also backed its full-year financial forecast.

The company reported net income of $39.4 million, or $0.38 per share, down 27 percent versus a prior-year profit of $54.1 million, or $0.50 per share. Excluding restructuring expenses and other items, adjusted earnings totaled $0.46 per share, compared with $0.51 per share a year earlier.

Revenue rose to $1.13 billion from $1.1 billion in the year earlier period. Wholesale apparel sales fell 4.6 percent to $623 million. Analysts had forecast $0.45 per share on projected sales of $1.11 billion. The company said that current business conditions remain "challenging," as higher interest rates, energy prices and geopolitical unrest combine to dampen consumer spending.

Liz Claiborne forecast earnings between $0.90 and $0.94 per share for the third quarter, and from $2.58 to $2.73 per share for the full year. Sales are expected to increase in the low single-digit range in the current quarter and full fiscal year.

K2 posts higher second-quarter profit
Second-quarter net profit for K2 Inc. (NYSE: KTO) rose, driven by higher profit margins in its team sports business, lower interest expense and a one-time gain related to a factory closure. Among the company's brands are Marmot, ExOfficio, Volkl and Marker.

K2 reported that its net income in the second quarter was up to $2.14 million, or $0.05 per share, compared to $1.5 million, or $0.03 per share, in the year-ago period. On an adjusted basis, K2 said it earned $0.07 cents a share, above analyst estimates of $0.06 per share. The company said the results include a net after-tax gain of $568,000 stemming from the closure of a bat manufacturing facility in Tennessee.

In K2's action sports segment, net sales of winter products and in-line skates totaled $37.5 million in the second quarter of 2006, a decrease of 14.9% from the 2005 second quarter, primarily due to licensing bikes to a third party in the third quarter of 2005. The company said the operating loss was $10.5 million, a slight increase in the loss compared to the loss of $9.9 million in the second quarter 2005.

K2's apparel and footwear division had net sales of $38.3 million in the second quarter of 2006, an increase of 1.8% from the 2005 period driven by growth in skateboard shoes and the ExOfficio and Marmot combination. The operating profit for the second quarter of 2006 was $400,000 compared to an operating profit of $3.0 million in the second quarter of 2005. The company said the decrease in profit was due to start up expenses associated with the opening of a new distribution center in Reno, Nev., and integration expenses for combining design, development, and sourcing for several apparel brands.

K2 said that for the second half of 2006, adjusted earnings per share should range between $0.64 and $0.67, based on assumed diluted shares outstanding of 56.3 million. For full-year 2006, K2 anticipates adjusted earnings per share to be in the upper end of a range between $0.83 and $0.86, based on 55.8 million fully diluted shares outstanding. Based on assumed basic shares outstanding of 47.1 million, the company anticipated adjusted earnings of $0.90 to $0.95.

Coleman parent posts 28 percent increase in Q2 revenue
Jarden Corp. (NYSE: JAH), parent of Coleman and Camping Gaz, saw its second-quarter profit more than doubled as revenue jumped, aided by increased sales in the company's outdoor goods division.

Quarterly earnings totaled $13.3 million, or $0.20 per share, compared to a profit of $5.7 million, or $0.12 per share during the same period last year. Results included $5.6 million reorganization and acquisition-related integration costs, $4.3 million in stock-option expenses, $900,000 in costs associated with ongoing integration activities and a $15.2 million tax provision adjustment. Adjusted for these one-time items, profit was $39.3 million, or $0.60 per share.

Revenue grew 28 percent to $962 million compared to $754.4 million last year. Analysts predicted a profit of $0.49 per share on revenue of $918.8 million.

Rocky Brands reports Q2 sales and profit losses
Rocky Brands (Nasdaq: RCKY) posted losses in both sales and profit for the second quarter, hit by weaker outdoor footwear and military sales.

Rocky's net sales decreased 12.5 percent to $57.3 million compared to $65.5 million for the corresponding period a year ago. The company said the decrease in sales was primarily attributable to weaker-than-expected results in outdoor footwear and apparel, and a decline in footwear sales to the military. In 2005, it had a $5.8 million military order, but nothing in the second quarter of 2006.

The company reported a net loss of $200,000, or $0.04 per diluted share, versus net income of $2.8 million, or $0.50 per diluted share, a year ago. It was hit with a $100,000 stock compensation fee and a one-time $400,000 refinancing charge. The two fees combined dropped its diluted shares by $0.07.

Based on second quarter results and current business trends, Rocky said it now anticipates net sales to be approximately $265 million for the year with net earnings of $1.25 per diluted share.

Zappos online shoe seller says it's close to $600 million goal
With five months left in the year, the online footwear website Zappos said it's close to hitting its goal of $600 million in gross merchandise sales for 2006. In seven years time, the company has gone from "almost nothing" in sales in 1999, with steady and significant increases: $1.6 million in 2000, $8.6 million in 2001, $32 million in 2002, $70 million in 2003, $184 million in 2004, and $370 million in 2005.

In its 2005 "Top 500" list, Internet Retailer magazine ranked Zappos as the 34th highest-grossing Internet retailer. And, it looks like the company is working on increasing its ranking for the 2006 list. Zappos said the last six months have been extremely busy for it as it builds up customer service and warehouse capacity.

The company has completed construction of its new warehouse, adding an additional 625,000 square feet on top of the 280,000 square feet of original warehouse, for a total of 905,000 square feet. Its workforce has grown to more than 800, and it has also increased the number of footwear brands it carries to 800.

To increase its financial flexibility and keep pace with its warehouse expansion, Zappos closed a $20 million warehouse line of credit with Davidson Kempner. This is in addition to the $60 million line of credit it has with Wells Fargo and US Bank to finance its inventory growth.

In a mid-year update letter, Zappos CEO Tony Hsieh said, "While we continued our strategy of running the business at break-even (within 1 percent of net sales) in order to maximize our growth, we were able to improve efficiencies throughout all of our departments, and in Q1 and Q2 of this year, we were able to squeeze out a small profit in each quarter. Historically, we typically experienced losses in Q1 and Q2 of each year and made most of our profits in Q4."

GSI Commerce reports Q2 loss
GSI Commerce (Nasdaq: GSIC) posted a second-quarter net loss in revenue. For 2006, the company reported net revenue of $119.6 million and a net loss of $3.6 million, or $0.08 per share, compared to net revenues of $91.9 million and a net loss of $2.9 million, or $0.07 per share, for 2005's second quarter. In the second quarter, the company was hit with a non-cash charge of approximately $400,000, or $0.01 per share, to reduce the carrying value of the shares owned by the company in Odimo Inc. from $1.3 million to approximately $900,000, which represents the market value of the shares as of July 1. These shares represent a portion of the consideration received when the company sold certain assets of Ashford.com to Odimo in fiscal 2002. GSI Commerce did not include this non-cash charge when it issued guidance for the second quarter and full year on April 26.

Wellman posts narrower loss
Wellman (NYSE: WLM) reported a lower net loss for the second quarter -- $15.3 million, or $0.48 per share, compared to a net loss of $25.4 million, or $0.80 per share, for the same period in 2005. The company said that "while our operating results improved from the first quarter, we did not achieve acceptable margins because our chemical raw material costs increased at a faster rate than we were able to implement selling price increases."

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