Royal Robbins climbs high, while parent company struggles in 4Q
Phoenix Footwear Group, parent of Royal Robbins, H.S. Trask, Trotters and Altama, reported that its president and COO has resigned, and said it will post a fourth-quarter loss and miss guidance for the full year due to softness in the company's Trotters and Altama Footwear brands.
The company is forecasting a fourth-quarter loss, compared with a year-ago profit of 2 cents per share. While Phoenix expects to be profitable for the year, the quarterly loss will drive results below prior guidance of 65 cents to 70 cents per share for fiscal 2004.
"While we will report strong revenue growth overall and solidly profitable results for 2004, we are disappointed with the performance of our Altama and Trotters brands," Chairman James Riedman said in a statement. "Altama remains a profitable unit and we believe we are taking the right steps to address the slowdown at this and our other brands through investment in new product and sales personnel, while preserving our overall profitability."
Phoenix said Trotters' sales decreased about 4 percent in 2004, while Altama sales fell about 33 percent during the second half of the year.
Phoenix's Royal Robbins brand posted a net sales increase of approximately 30 percent for the full year compared to pro forma net sales for 2003. During 2004, Royal Robbins expanded its distribution base among new channels, including Dillard's and Dick's Sporting Goods, according to the company. Royal Robbins continues to expand its fall 2005 offering and is experiencing strong acceptance of its product at retail, it said. It is expected to post strong organic growth in 2005.
Phoenix's president and COO, Greg Tunney, resigned to pursue other personal interests. CEO Richard White will take over both positions.
Gander Mountain slapped with lawsuits for SEC violations
At least six law firms have filed class action lawsuits against Gander Mountain (NasdaqNM: GMTN) for SEC violations. Most of the lawsuits have been filed in the United States District Court for the District of Minnesota on behalf of purchasers of its common stock during its Initial Public Offering and on the open market between April 20, 2004, and Jan. 13, 2005.
The majority of the law firms allege that Gander Mountain violated federal securities laws by issuing false and misleading statements. Specifically, defendants failed to disclose that: Gander Mountain's co-branded credit card program was faltering; the value of its inventory was overstated, causing its future margins to be negatively impacted; its debt capacity was jeopardized and was inconsistent with defendants' growth plans; it was experiencing average trends with respect to its sales; and defendants' projections of positive comparable sales growth of 3 percent to 5 percent and pretax income of $13 million were materially misleading.
On April 26, 2004, Gander Mountain closed its IPO of 6,583,750 shares of its common stock and converted existing preferred stock to common stock, raising more than $105 million. On Nov. 9, 2004, Gander Mountain announced it had "lowered its outlook for pretax income for fiscal 2004 to a range of $8 million to $13 million, compared with the company's prior guidance of $16 million to $21 million." On Jan. 14, 2005, it issued a press release lowering its outlook for pretax income for fiscal 2004 even further, "to a range of $2.0 million to $4.0 million, compared with the company's prior guidance of $8 million to $13 million." On this news, Gander Mountain's shares plummeted to a close of $9.43. During the open market period stated in the suits, Gander Mountain traded as high as $24.65.
Law firms that have filed are Smith & Smith LLP; Schiffrin & Barroway LLP; Charles J. Niven; Reinhardt Wendorf & Blanchfield; Schatz & Nobel; and Lerach Coughlin Stoia Geller Rudman & Robbins LLP. In certain suits defendants include not only Gander Mountain Company, but also Mark R. Baker, Dennis M. Lindahl, Gerald A. Erickson, Donovan A. Erickson, Neal D. Erickson, Richard A. Erickson, Marjorie J. Pihl and Ronald A. Erickson.
The cases are pending in the United States District Court for the District of Minnesota and no class has yet been certified. Purchasers of the stock have until March 29 to contact the court for inclusion as a plaintiff.
Columbia Sportswear reports 4Q and FY 2004 earnings
Columbia Sportswear (Nasdaq: COLM) reported record fourth-quarter net sales of $301.8 million, an increase of 17.2 percent over net sales of $257.4 million in 2003. For the quarter ended Dec. 31, 2004, the company said it also had record net income for the fourth quarter of $39.4 million, a 22.4 percent increase over 2003's net income of $32.2 million. Diluted earnings per share for the fourth quarter of 2004 were $0.97 on 40.6 million weighted average shares, compared to 2003's diluted earnings per share of $0.79 on 40.9 million weighted average shares.
Compared to the fourth quarter of 2003, U.S. sales increased 15.4 percent to $181.1 million, other international sales increased 25.3 percent to $44.1 million, European sales increased 18.9 percent to $44.0 million, and Canadian sales increased 15.2 percent to $32.6 million for the fourth quarter of 2004.
For the fourth quarter of 2004, sportswear sales increased 37.5 percent to $80.7 million, outerwear sales increased 10.5 percent to $154.7 million, footwear sales increased 18.9 percent to $52.8 million, equipment sales increased 11.1 percent to $1 million and accessories sales decreased 6 percent to $12.6 million, compared to the fourth quarter of 2003.
Tim Boyle, Columbia's president and CEO, said, "Despite unseasonable weather conditions in many key markets, sales growth was exceptional in our sportswear and footwear product categories, and sales of outerwear products were strong in Europe and other international markets. Our diversified line of outdoor products and the expanding geographic presence of our brands were key drivers of overall sales growth during the fourth quarter."
For FY 2004, Columbia reported net sales of $1,095.3 million, an increase of 15.1 percent over net sales of $951.8 million for 2003. It had record net income for 2004 of $138.6 million, a 15.4 percent increase over net income of $120.1 million for 2003. Diluted earnings per share for 2004 were $3.40 on 40.8 million weighted average shares, compared to diluted earnings per share of $2.96 in 2003 on 40.6 million weighted average shares.
Compared to 2003, U.S. sales increased 11.7 percent to $666.7 million, European sales increased 26.0 percent to $170.3 million, Other International sales increased 25.0 percent to $141.4 million, and Canadian sales increased 9.6 percent to $116.9 million for 2004.
For 2004, sportswear sales increased 27.3 percent to $396.4 million, footwear sales increased 24.2 percent to $184.6 million, outerwear sales increased 3.7 percent to $460.3 million, equipment sales increased 68.1 percent to $7.9 million, and accessories sales increased 6 percent to $46.1 million, compared to 2003.
Kellwood stock drops with lowered 4Q guidance
Kellwood Co.'s (NYSE: KWD) stock dropped almost 7 percent Jan. 25 after it lowered its expected fourth-quarter sales to $585 million. Its previous guidance from early December was $600 million. Last year's fourth-quarter sales were $521 million.
Net earnings from continuing operations in the fourth quarter are expected to be approximately $6.5 million, or approximately $0.23 per diluted share, which is below the Dec. 2 guidance of $13.7 million or $0.48 per share, according to the company. Last year, it reported net earnings of $12.8 million and earnings per diluted share of $0.46 from continuing operations in the fourth quarter.
"Essentially all of the drop in sales and earnings from our earlier forecast occurred in the women's sportswear segment due to a combination of having to provide significantly more end-of-year markdown assistance for some of our brands, having to sell more units off price to liquidate seasonal inventory, and lower than expected Spring 2005 orders," said Hal Upbin, chairman and CEO of Kellwood.
Kellwood now expects sales for the year to be approximately $2.55 billion, versus its earlier forecast of $2.57 billion. Last year Kellwood reported sales of $2.35 billion.
Kellwood shares lost $2.08 to finish at a 52-week low of $28.12 on Jan. 25.
adidas-Salomon hits record earnings in 2004
Based on preliminary figures, 2004 sales for adidas-Salomon (ADSG.DE) reached Euro 6.478 billion (USD $8.470 billion), a 7 percent improvement in currency-neutral terms. In euros, sales increased 3 percent from 2003's Euro 6.267 billion (USD $8.194 billion). Currency-neutral sales increased for all brands and in all regions.
Group gross margin increased 2.3 percentage points to 47.2 percent in 2004 from 44.9 percent in 2003. The company said it is the highest level ever and reflects the impact of increased adidas own-retail activities, an improving product mix as well as a stronger euro.
Operating expenses in 2004 grew 7 percent to Euro 2.478 billion (USD $3.240 billion) from 2003's Euro 2.324 billion (USD $3.038 billion). Group operating profit increased 18 percent to Euro 580 million (USD $758 million) versus Euro 490 million (USD $640.7 million) in 2003 and operating margin grew 1.1 percentage points to 9.0 percent in 2004 from 7.8 percent in 2003. As a result, income before taxes grew 19 percent to Euro 520 million (USD $680 million), compared to Euro 438 million (USD $573 million) in the prior year -- driven by higher sales and strong gross margin improvement.
Net income for the group in 2004 increased by 21 percent to a record Euro 314 million (USD $411 million) from Euro 260 million (USD $340 million) in 2003. Earnings per share for 2004 were Euro 6.88 (USD $8.99) compared to Euro 5.72 in 2003 (USD $7.48). The earnings growth is twice as high as the initial guidance at the beginning of the fiscal year.
(Conversion of Euros into U.S. dollars is for information only, is not necessarily relative to earning, and is based on the currency rate as of Jan. 27.)
Suunto seeks new president, parent company releases earnings
Suunto's President Dan Colliander has left the company after four years, and a search for a new appointee is underway. In the meantime, Suunto's Financial Director Mika Harjuaho and Director of Commercial Operations Ian Crichton will jointly perform the duties of president until the position is filled.
Suunto's parent company Amer Group reported that Suunto's net sales rose by 0.8 percent to Euro 77.2 million (USD $ 98.6 million). Comparable net sales in local currencies increased by 3 percent. The Americas generated 40 percent of net sales and EMEA 50 percent. Sales grew by 13 percent in the Americas and declined by 6 percent in EMEA. Sales of Suunto wrist-top computers grew by 2 percent during the year. Sales of diving instruments remained at 2003 levels. Wrist-top computers and diving instruments accounted for 64 percent of Suunto's net sales. Also, net sales for the Winter Sports Division, which includes Atomic, grew by 9.2 percent to Euro 205.6 million (USD $262.4 million). Comparable net sales in local currencies rose by 11percent. Sales grew by 13 percent in EMEA and 5 percent in the Americas. Average product prices declined due to an increasing proportion of sales being derived from lower price-point products.
In other Amer business, the company will propose at its annual meeting March 16 in Helsinki, Finland, that the company name be changed to Amer Sports Oyj (Amer Sports Corp. in English). The board said that greater clarity and consistency will be achieved in corporate communications once the Amer Sports name, which has been used for marketing purposes since 2000, is also adopted as the company's business name.
(Conversion of Euros into U.S. dollars is for information only, is not necessarily relative to earning, and is based on the currency rate as of Feb. 4.)
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