Outdoor financials: Deckers swings to profit in Q2a, plus Kellwood, Dick's Sporting Goods, Rocky, LaCrosse, Jarden, Eddie Bauer, West Marine, Hibbett Sports

Deckers returned to a profit in Q2, Kellwood out of woods for now with bond exchange offer completed, Dick's picked up six Oregon locations from Joe's bankruptcy, Rocky Brands swung to a Q2 loss, LaCrosse's Q2 sales were up thanks to the work category, Jarden reported a Q2 revenue dip, a court approved Golden Gate capital's cash bid for Eddie Bauer, West Marine settles an SEC investigation, and Hibbett Sports hired a new VP of merchandising.
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Deckers swings to profit in Q2

With a shift in marketing expenses and a sales boost from its Uggs brand, Deckers Outdoor (Nasdaq: DECK) said it returned to a profit in the second quarter. The company is parent of Ugg, Teva, Simple and Ahnu.

Quarterly profit totaled $2.9 million, or $0.22 per share, compared with a loss of $3.8 million, or $0.29 per share last year. Excluding write-downs related to its Tsubo brand, net income totaled $0.22 per share.

Revenue increased 13 percent to $102.5 million from $91.1 million a year ago.

The company had formerly forecast a loss of $0.10 to $0.15 per share due to a shift in marketing expenses, but it moved those expenses to the second half of the year. Deckers also credited the better-than-expected results to lower-than-projected operating expenses and higher sales.

Ugg net sales for the second quarter increased 22.9 percent to $74.4 million compared to $60.6 million for the same period last year. The sales gain was primarily attributable to an increase in global shipments of fall product versus the same period a year ago.

Teva net sales dropped 10.6 percent to $22.6 million for the second quarter on lower orders compared to $25.2 million for the same period last year.

Net sales for Simple decreased 25.2 percent to $3.5 million compared to $4.7 million for the same period last year on a lower-than-normal rate of reorder business.

Combined net sales of the company’s other brands, Tsubo and Ahnu, were $2.1 million for the second quarter of 2009 compared to $0.7 million in Tsubo sales for the same period last year. The company acquired Tsubo in the second quarter of 2008 and Ahnu in the first quarter of 2009.

Looking ahead, Deckers is raising its full-year revenue outlook, expecting its revenue to increase approximately 9 percent to 10 percent over 2008, compared to previous guidance of approximately 7 percent to 9 percent.

It expects third-quarter revenue and diluted earnings per share to increase approximately 14.0 percent and 10.0 percent, respectively, over 2008 levels.

It expects fourth-quarter revenue to decrease slightly and non-GAAP diluted earnings per share to decrease approximately 4 percent from 2008 levels due to a shift of sales of Uggs.

The fourth-quarter forecast news caused shares to fall $9.21, or 12 percent, to $68 during aftermarket trading on July 23. The stock ended the regular session up $3.47 at $77.21.

Kellwood out of woods for now with bond exchange offer completed

Kellwood Company, owner of American Recreation Products, announced on July 23 that it had successfully completed its bond exchange of new senior secured notes due in 2014 for its existing senior notes that were due on July 15, 2009.

The completion of this transaction further strengthens ARP's financial position and will allow it to build on the operational improvements the company has made to date. It will also provide ARP with additional opportunities to grow its brands and business.

"We have been heartened by the expressions of support from our vendors over the past few weeks as we worked through the bond extension process and believe our relationship is a key reason for the success of ARP and our outdoor brands," said Geoff O’Keeffe, vice president operations for American Recreation Products in a letter sent to vendors. "We have great people, loyal partners and efficient operations. With the bond process completed, ARP is ready to move forward aggressively and reach our full potential."

Dick's picks up six Oregon locations from Joe's bankruptcy

The bankruptcy and liquidation of Joe's Sports, Outdoor & More is allowing Dick's Sporting Goods (NYSE: DKS) the chance to accelerate expansion plans in Oregon, where it presently has just one store.

Dick's has committed to take over six former locations of the Joe’s Sports chain, which went out of business in May.

Representing 300,000 square feet of new space, the new Dick's stores are expected to open this fall in locations that include suburban Portland, Eugene and Bend.

Rocky Brands swings to Q2 loss

A double whammy of a difficult retail environment and higher closeout sales hit both Rocky Brands' (Nasdaq: RCKY) sales and profits for the second quarter.

For the quarter ended June 30, net sales decreased to $51.2 million versus net sales of $60.5 million in the second quarter of 2008.

Wholesale sales for the second quarter were $37.9 million compared to $42.5 million for the same period in 2008. Retail sales were $12.3 million compared to $16.2 million last year. Military segment sales were $0.9 million versus $1.8 million.

The company reported a net loss of $1.4 million, or $0.25 per diluted share, versus a net income of $0.7 million, or $0.13 per diluted share, a year ago.

Gross margin in the second quarter of 2009 was $17.7 million, or 34.6 percent of sales compared to $24.4 million, or 40.3 percent for the same period last year.

Selling, general and administrative expenses decreased 13.4 percent to $18.1 million, or 35.4 percent of sales for the second quarter of 2009 compared to $20.9 million, or 34.5 percent of sales, a year ago.

Inventory decreased $6.2 million, or 7.3 percent, to $79.3 million compared with $85.5 million on the same date a year ago.

LaCrosse's Q2 sales up on work category

LaCrosse Footwear (Nasdaq: BOOT) said its second-quarter consolidated net sales were up 8 percent boosted by sales in its work market category.

For the quarter ended June 27, LaCrosse reported consolidated net sales of $30.0 million versus $27.8 million in the second quarter of 2008.

Net income was $1.7 million, or $0.26 per diluted share, from $1.4 million, or $0.22 per diluted share, last year. That translates to a 15-percent increase in net income and an 18-percent increase in earnings per common share.

Sales to the work market were $21.8 million, up 26 percent from $17.4 million for the same period last year. It said the growth in work sales reflects continued penetration into various branches of the U.S. military.

Sales to the outdoor market were $8.1 million, down from $10.5 million for the same period of 2008, reflecting continued softness in the overall retail environment.

For the second quarter of 2009, gross margins were a record 40.8 percent of net sales, up from 40.4 percent in the same period of 2008.

LaCrosse’s operating expenses were $10.2 million in the second quarter of 2009, up $1.3 million from the second quarter of 2008.

The company also completed the transition into its new Midwest distribution center, which, it said, has already begun to enhance operating efficiency, customer service and speed of delivery. It also completed the acquisition of END Footwear.

Its board approved a quarterly dividend of $0.125 per share of common stock, payable on Sept. 18 to shareholders of record on Aug. 22.

Jarden reports Q2 revenue dip

As its profits rose 4 percent, Jarden (NYSE: JAH), parent of Coleman, K2 and Marmot, saw its second-quarter revenue fall 7 percent from the recessionary environment.

Second-quarter profit rose 4 percent to $44.9 million, or $0.53 per share, from $43 million, or $0.56 per share on fewer shares outstanding last year. Excluding costs related to a reorganization and acquisition, amortization of acquired intangible assets and a tax provision adjustment, net income was $0.60 per share.

Revenue fell 7 percent to $1.27 billion, down from $1.36 billion a year earlier, hurt partly by the stronger dollar.

The company said it cut costs and lowered inventory to offset lower revenue.



Court OKs Golden Gate capital's cash bid for Eddie Bauer


Eddie Bauer Holdings (Pink Sheets: EBHIQ) said it has received bankruptcy court approval to proceed with the sale of its business to Golden Gate Capital for $286 million in cash. With the court's approval, the transaction is on track to close in early August.

The company, which filed for Chapter 11 bankruptcy protection in June, previously reported that the bid was the highest and best offer in its bankruptcy auction. Eddie Bauer has said Golden Gate's bid would keep most of its stores open and workers on the job.

Earlier this month, Eddie Bauer received final approval from the U.S. Bankruptcy Court in Delaware for $100 million in debtor-in-possession financing and other motions that allowed it to continue operating while awaiting a sale.

Golden Gate Capital is a San Francisco-based private equity investment firm with approximately $9 billion of assets under management.



West Marine settles SEC investigation


West Marine (Nasdaq: WMAR) said it has reached a settlement with the Securities and Exchange Commission, resolving an SEC investigation of the company's 2007 restatement of its financial results for fiscal years 2002 through 2005 and for the first three quarters of fiscal year 2006.

The restatement resulted from a company-initiated review in 2007, during which it identified and corrected its accounting for indirect inventory cost capitalization. Under the settlement, without admitting or denying the allegations made in the SEC’s complaint, the company consented to a permanent injunction against any future violations.

West Marine CEO Geoff Eisenberg said in a statement, "The settlement constrains our ability to comment on the SEC’s allegations. I can say, however, that after nearly two years of cooperating with the SEC's staff, we are very pleased to report that no fines, penalties or other monetary sanctions were assessed against the company. We also understand that the SEC is not proceeding against any of the company’s past or current associates or directors."

Hibbett hires new VP of merchandising

Hibbett Sports (Nasgaq: HIBB) said Rebecca Jones will join the company in August as vice president of merchandising.

Jones is currently vice president/general merchandise manager at Jo-Ann Fabric and Craft Stores. Prior to joining Jo-Ann Fabric in 2003, she served as vice president/divisional merchandise manager at Wal-Mart Stores from 1999 to 2003.

She began her retail career at Fred Meyer Stores in 1982, serving in various operations, planning, buying and merchandising positions, including vice president/divisional merchandise manager from 1997 to 1999.

--Compiled by Wendy Geister

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