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Outdoor financials: Q3 sales for Amer Sports drop 5 percent, plus Timberland, Luxottica, West Marine - SNEWS

Outdoor financials: Q3 sales for Amer Sports drop 5 percent, plus Timberland, Luxottica, West Marine

Q3 sales for Amer Sports dropped 5 percent, Timberland's Q3 profit rose 23 percent, profit fell 21 percent for Oakley's parent company, and West Marine's Q3 sales dropped 6.7 percent.
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Q3 sales for Amer Sports drop 5 percent

Amer Sports, parent of Salomon, Arc'Teryx and Suunto, reported a 5-percent decline in third-quarter net sales, saying the U.S. market continues to post lower numbers than its European counterpart.

Net sales for the company dropped 5 percent to EUR 410.6 million (USD $607.1 million) from EUR 433.2 million (USD $640.6 million) last year. In local currencies, net sales decreased by 6 percent.



Gross profit was down 8 percent -- 9 percent in local currencies -- to EUR 171.3 million (USD $253.3 million) versus EUR 186.2 million (USD $275.3 million) last year.

EBIT was EUR 40.7 million (USD $60.1 million) compared to EUR 51.5 million (USD $76.1 million) -- a 21 percent drop -- mainly reflecting the weaker profitability of the company's North American operations, the company said.



Earnings before taxes were EUR 38.4 million (USD $56.7 million), down 12 percent from last year's EUR 43.8 million (USD $64.7 million). Earnings per share were down 16 percent to EUR 0.38 (USD $0.56) compared to EUR 0.45 (USD $0.66).



"The overall sales trend during the third quarter followed the one seen during the first half of the year. The U.S. market continues to be more challenging than the European market, and consumers have been moving to value price points," said Roger Talermo, Amer Sports' president and CEO, in a statement. "Due to a warm fall in Central Europe, the trade requested later deliveries of pre-ordered winter sports equipment, which partly explains the decline in sales for Amer Sports of 6 percent in the third quarter."



The company said it will continue to focus on cost controls and is planning to take its cost base further down in order to protect the bottom line.

"We do not anticipate a quick recovery of the sporting goods market, even if trading conditions would start to improve next year," Talermo said. "We are also considering alternatives to shift the focus of the business portfolio more toward categories where we believe the best long-term opportunities exist and where the best group-wide synergies can be achieved."

For the winter and outdoor business segment, net sales dropped 2 percent to EUR 262.4 million (USD $388 million) versus EUR 267.6 million (USD $395.7 million) in the same period last year. In local currency terms, the decline was also 2 percent.

The EBIT of EUR 44.1 million (USD $65.2 million) compared to EUR 45.7 million (USD $67.5 million) fell by 4 percent in local currency terms.

By category, sales were:

>> Winter sports equipment: EUR 119.6 million (USD $176.8 million), down 7 percent from EUR 128.7 million (USD $190.3 million)

>> Apparel and footwear: EUR 99.3 million (USD $146.8 million), up 6 percent from EUR 93.5 million (USD $138.2 million)

>> Cycling: EUR 21.5 million (USD $31.7 million), down 9 percent from EUR 23.5 million (USD $34.7 million)

>> Sports instruments: EUR 22.0 million (USD $32.5 million), flat from EUR 21.9 million (USD $32.3 million)

The company said the winter sports equipment order book for the 2009/10 season is on last year's level with strong growth in cross-country skiing and protective items. The order level in North America is significantly below last year's level, it added, whereas it is up in Central Europe and in Scandinavia. Profitability in the winter sports equipment business is improving in 2009 because of previously implemented cost efficiency measures, the company noted.



In the apparel and footwear category, the company said the U.S. market has remained depressed, while demand in Europe has remained encouraging with good reorders of Salomon footwear. Overall delivery performance is very positive, and inventory management continues to improve according to targets, it added.



Amer Sports said guidance for the overall company is unchanged: FY '09 EBIT will be below last year's level. The expected improvement for winter sports equipment due to previously implemented cost-efficiency measures is more than offset by weakness in other Amer Sports businesses.



(Conversion of Euros into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of Oct. 29.)

Timberland's Q3 profit up 23 percent

Timberland (NYSE: TBL) said its third-quarter profit rose a better-than-expected 23 percent as the company trimmed costs and demand improved for its boots and SmartWool apparel.

For the quarter ended Oct. 2, profit rose to $37.8 million, or $0.68 per share, from $30.7 million, or $0.52 per share, in the same quarter a year ago.

Revenue dipped slightly 1 percent to $421.7 million from $423.6 million.

Timberland said North America revenue increased 2.0 percent to $188.2 million, reflecting strong growth in the kids’ boot business and in the SmartWool brand.

Europe revenue decreased 2.3 percent to $195.2 million but increased 3.3 percent on a constant dollar basis. European results reflect strong increases in the boots business across all categories, which partially offset declines in the casual and apparel businesses.

Asia revenue decreased 2.3 percent to $38.3 million, and decreased 9.1 percent on a constant dollar basis, driven by declines in casual footwear and apparel, partially offset by strengthening of the men’s and kids’ boots businesses.

Global footwear revenue increased 1.8 percent to $319.1 million, primarily due to strength in the boots business across all markets. Apparel and accessories revenue decreased 6.7 percent to $95.8 million, due to softness across all regions.

Global wholesale revenue was relatively flat at $342.2 million. Worldwide consumer direct revenue decreased 4.2 percent to $79.5 million, reflecting the adverse impact of foreign exchange and weakness in the North America outlet stores.

Operating income for the third quarter of 2009 was $58.5 million, compared to operating income of $53.2 million in the prior year period. In the quarter, foreign exchange rate changes decreased operating income by approximately $7 million.

In the third quarter of 2009, the effective tax rate was 38.2 percent. For the full-year 2009, the Company anticipates that its effective tax rate will be approximately 28.5 percent.



Profit fell 21 percent for Oakley parent


Luxottica (NYSE: LUX), parent of Oakley, said its third-quarter profit fell 21 percent, but added that markets in "several countries have shown encouraging signs of returning to growth."

Net profit fell to EUR 83.1 million (USD $122.8 million) in the quarter ended Sept. 30 from EUR 104.6 million (USD $154.6 million) a year earlier. Sales rose 0.9 percent to EUR 1.22 billion (USD $1.80 billion).

"We believe that the worst is behind us," CEO Andrea Guerra said in a statement.

Overall, the European market improved for the second quarter in a row, and the third quarter saw stabilization in international markets, the company said.

The company's free cash flow was EUR 207 million (USD $306.1 million), while its debt declined to EUR 2.41 billion (USD $3.56 billion) as of Sept. 30 from EUR 2.62 billion (USD $3.87 billion) as of June 30.

Luxottica didn't provide an outlook for the fourth quarter or 2010, but it said it is optimistic about the future, and that it is "working to make sure that 2010 is again a normal year."



(Conversion of Euros into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of Oct. 29.)



West Marine Q3 sales drop 6.7 percent

Despite a rise in profit, West Marine (Nasdaq: WMAR) said its third-quarter revenue fell 6.7 percent as same-store sales dropped.

For the quarter ended Oct. 3, net revenues were $168.2 million versus $180.2 million for the 2008 fiscal third quarter. Same-store sales declined 4.3 percent from last year.

The company said adjusted for the impact of a fiscal calendar shift from the 53-week 2008 fiscal year, 2009 fiscal third quarter net revenues would have increased by $0.3 million, or 0.2 percent, and same-store sales would have increased by $5.1 million, or 3.7 percent, over last year.

Also, stores closed during the third and fourth quarters of 2008 and first three quarters of 2009 reduced net revenues by $8.9 million versus last year. The company said this decline was largely offset by $5.9 million of net revenues from new stores opened during the third and fourth quarters of 2008 and first three quarters of 2009.

Net income was $8.4 million, or $0.38 per share, compared to $3.4 million, or $0.16 per share.

Gross profit was $47.5 million, a decrease of $2.3 million compared to the same period of fiscal 2008. As a percentage of net revenues, gross profit increased by 0.6 percent to 28.2 percent compared to gross profit of 27.6 percent last year.

Selling, general and administrative expense for the quarter was $38.6 million, a decrease of 11.9 percent, compared to $43.9 million for the same period last year, and SG&A expense as a percentage of revenues decreased by 1.5 percent to 22.9 percent.

--Compiled by Wendy Geister

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