Outdoor financials: Timberland Q3 profit drops 53 percent, plus Jarden, LaCrosse, Under Armour, Crocs, Cabela's, Liz Claiborne, Wellman, Exel, Big 5, Kellwood, Liberty Media

Timberland's Q3 profit dropped 53 percent, Jarden's Q3 profit was hurt by acquisition costs, LaCrosse posted Q3 sales and profit increases, Under Armour's Q3 earnings were up 25 percent, Crocs' Q3 profit and sales more than doubled, Cabela's Q3 profit fell 12 percent, Liz Claiborne's Q3 profit fell 65 percent, Wellman said it would explore strategic alternatives, Exel reported a Q3 net loss in sales, Big 5's Q3 earnings rose on higher revenue, Kellwood elected a new board member, and Liberty increased its buyback by $1 billion.
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Timberland Q3 profit drops 53 percent

Third-quarter profit for Timberland (NYSE: TBL), parent of the SmartWool, GoLite Footwear, Mion and Timberland brands, dropped 53 percent due to costs for closing stores and a drop in revenue in the company's footwear division.

For the quarter ended Sept. 28, net income fell to $25.9 million, or $0.42 per share, from $55.6 million, or $0.88 per share in the prior-year quarter. The company said excluding restructuring costs related to Timberland's decision to close several retail locations, it earned $0.49 per share.

Revenue fell 14 percent to $433.3 million from $503 million in the third quarter of 2006. U.S. revenues decreased 23.3percent from declines in boots, kids' sales and Timberland apparel, but was offset by strong growth in SmartWool apparel and accessories.

International revenue decreased 4.4 percent, or 9.3 percent on a constant dollar basis, driven by declines in Europe and Canada, which offset strong growth in Asia.

Jeffrey B. Swartz, Timberland's president and CEO, said in a statement, "I am not satisfied with our current financial performance and, together with our leadership team, will continue to review our entire portfolio to identify further opportunities to enhance our effectiveness and deliver improved performance for our shareholders."

Global footwear revenues of $310.3 million were down 15.7 percent. Apparel and accessories revenue decreased 10.2 percent to $116.2 million. Global wholesale revenue decreased by 17.3 percent to $344.0 million.

Operating income for the quarter was $44.7 million, compared to $84.7 million in the prior year period, driven by revenue declines and gross margin pressures due to lower boot sales in the United States and Europe, increased levels of off-price sales and markdowns and higher product costs.

Same-store sales dropped 4.8 percent on the domestic retail side, while global retail same-store sales slipped 5.6 percent.

For the fourth quarter, Timberland said it anticipates revenue declines in the mid-single digit range reflecting soft market conditions in the United States and Europe and operating margin declines in the range of 200 basis points compared to the prior year excluding restructuring costs.

For 2008, Timberland is targeting mid-single digit first-half revenue declines and improved operating results, compared with first half 2007 comparable results.

Jarden Q3 profit hurt by acquisition costs

Jarden (NYSE: JAH), parent of Coleman, Campingaz and K2, said third-quarter profit fell 59 percent, hurt by costs related to the acquisitions of K2 and Pure Fishing.

Quarterly net income fell to $21.2 million, or $0.28 per share, from $51.3 million, or $0.78 per share, in the prior-year quarter.

Excluding a broad range of items, like reorganization and integration costs and expenses for stock-based compensation, the company said adjusted earnings were $0.94 per share, or $0.80 per share including the stock-option expense.

Revenue rose 28 percent to $1.32 billion, from $1.03 billion last year.

Its adjusted SG&A costs were about $220 million and $146 million, or 17 percent to 14 percent of net sales from the third quarters of 2007 and 2006, respectively. Jarden said the increase from the prior year primarily reflects the inclusion of K2 and Pure Fishing and planned increases in marketing, advertising and promotional expense.

SunTrust Robinson Humphrey analyst William Chappel said in a note to investors that results beat expectations due to higher revenue and lower selling, general and administrative expenses. He added in the note, "The company indicated that the addition of K2 and a stronger than anticipated sell-in for the ski season led to strong results in outdoor solutions."

LaCrosse posts Q3 sales and profit increases

LaCrosse Footwear (Nasdaq: BOOT), parent of the Danner and LaCrosse brands, said third-quarter sales rose 12 percent, driven by the success of its fall product lines, strong gross margins and inventory management.

For the third quarter of 2007, LaCrosse reported consolidated net sales of $36.9 million, compared to $32.8 million in 2006. Net income was $3.3 million, or $0.52 per diluted share, up 30 percent from $2.5 million, or $0.41 per diluted share in the third quarter of 2006.

Sales to the outdoor market were $21.8 million for the third quarter of 2007, up 7 percent from $20.3 million for the same period of 2006. LaCrosse said year-over-year growth primarily reflects increased penetration into the cold weather and rugged outdoor boot markets. Sales to the work market were $15.1 million for the third quarter of 2007, up 20 percent from $12.5 million for the same period of 2006.

Gross margin was 39.1 percent of net sales, up from 38.6 percent in the same period of 2006. Total operating expenses were $9.5 million or 26 percent of net sales compared to $8.7 million or 27 percent of net sales last year.

At the end of the third quarter of 2007, LaCrosse had cash and cash equivalents of $4.7 million, up 87 percent from 2006's $2.5 million. The company said its inventory at the end of the third quarter increased 8 percent from the end of the same period in 2006, a substantially lower increase than its sales growth, reflecting improved inventory management.

Under Armour Q3 earnings up 25 percent

Third-quarter earnings for Under Armour (NYSE: UA) rose 25 percent primarily from strength in the apparel business.

For the quarter that ended Sept. 30, Under Armour earned $20 million, or $0.40 per share, compared with $16 million, or $0.32 per share, in the same quarter last year.

Under Armour said its revenue rose to $186.9 million from $127.7 million.

Under Armour said its men's apparel sales rose to $113 million from $79.2 million in the same quarter last year, while its women's apparel sales increased to $39.5 million from $26.5 million. Youth apparel sales increased by about $5.6 million to $16.6 million.

The company said compression, or tight fitting, and training categories led to the most apparel growth, and golf products and recently launched mountain products helped as well.

It raised guidance for income from operations to between $81.5 million and $83 million, compared with an earlier estimate between $79 million and $81 million. The company expects revenue between $590 million and $600 million, better than its prior range of $580 million to $590 million.

The company said inventory more than doubled year over year to $151.8 million -- a concern to some analysts.

"This is likely to keep investors questioning if the company can 'sell-through' the higher inventory levels over the next three to four months," wrote Wachovia Capital Markets LLC analyst John Rouleau in a note to investors.

Shares rose $4.98, or 8.5 percent, to close at $63.71 on Oct. 30. The stock has traded between $41.37 and $73.40 during the past 52 weeks.



Crocs Q3 profit, sales more than double, shares tank in after-hours trading


Crocs (Nasdaq: CROX) said its third-quarter profit more than doubled, helped by strong global demand. But a revised 2007 earnings guidance range mostly below analyst estimates sent shares down in after-hours trading.

The company reported income of $56.5 million, or $0.66 per share, compared with $21.5 million, or $0.27 per share, in the year-ago period. The earnings-per-share amounts have been adjusted to reflect the two-for-one stock split that took effect in June, the company said.

Revenue more than doubled to $256.3 million from $111.3 million.

Crocs attributed its third-quarter earnings growth to exceptionally strong global demand throughout the summer. Subsequently, Crocs was able to expand its gross margins 240 basis points to 61 percent.

The company said the opening of a new 320,000-square-foot distribution center in Europe would enable it to support future growth in that region.

On Oct. 31, Crocs shares rose $2.66, or 3.7 percent, to end regular trading at $74.75. The stock hit an intraday high of $75.21, eclipsing a 52-week high of $73.75. But in aftermarket trading the shares dropped $15.01, or 20 percent, to $58.74.



Cabela's Q3 profit falls 12 percent


Cabela's (NYSE: CAB) said its third-quarter profit fell 12 percent due to more promotions and disappointing sales at two stores opened last year.

For the quarter ended Sept. 29, net income dropped to $13.2 million, or $0.20 per share, from $15 million, or $0.23 per share in the prior year quarter. The company said its profit was affected by more promotions, which resulted in lower margins. Also, two stores opened in 2006 did not meet the company's sales expectations.

Revenue increased 11.5 percent to $546.8 million from $490.5 million in the third quarter of 2006. The company said revenue rose in every division, led by an 18 percent boost in retail revenue. Financial services revenue -- which makes up a much smaller portion of total revenue recorded by the company -- gained 20 percent.

Same-store sales grew 4.6 percent.

The company said for the full 2007 year it expects earnings per share to grow at a "high single-digit growth rate."

Prana-parent Liz Claiborne Q3 profit falls 65 percent

Liz Claiborne (NYSE: LIZ), parent of Prana, said its third-quarter profit dropped 65 percent due to hefty charges and a drop in sales in the company's partnered brands division.

For the quarter, net income fell to $33.1 million, or $0.33 per share, from $95.2 million, or $0.93 per share in the prior year period. The company said it earned $0.63 per share, excluding charges for streamlining operations, trademark impairments and a $2.5 million loss on the disposal of discontinued operations.

Revenue fell 4 percent to $1.26 billion from $1.31 billion in the third quarter of 2006.

The company said its direct brands segment performed well, but results in its partnered brands division were weak.

As a result, the company cut its 2007 profit outlook and now expects earnings per share between $1.70 and $1.80 for the full year, excluding charges and expenses. Previously, it expected profit between $1.90 and $2 per share.

Liz Claiborne said about $0.15 per share of the drop was due to the expected weak performance of several of the brands that the company is reviewing for possible sale -- including Prana -- and the possibility that a sale could come earlier than first thought. The outlook dropped another $0.04 per share due to higher marketing spending for the company's direct brands.

Wellman to explore strategic alternatives, reports Q3 earnings

In addition to reporting its third-quarter results, Wellman (NYSE: WLM) said it would be exploring strategic alternatives for the company.

Tom Duff, Wellman's chairman and CEO, said in a statement, "Our board has decided to explore strategic alternatives for Wellman before we begin the task of refinancing our debt in 2008. We have engaged Lazard Frères & Co., an investment bank with extensive experience in chemical M&A transactions, and hope to expeditiously conclude this process."

He added that the company is further streamlining its operations and expects to reduce its 2008 costs by $20 million to $25 million compared to 2007 levels.

For the quarter, Wellman narrowed its net loss to $26.3 million, or $0.81 per share, from $37.9 million, or $1.19 per share, for the same period in 2006. The company said results were negatively impacted by "increased competitive pressures as new PET resin capacities were fully introduced into the NAFTA market." Net sales this quarter were $307.6 million versus $270.8 million last year.

"Despite disappointing third-quarter results, we were able to reduce our outstanding debt by $21.2 million, primarily as a result of the sale of our European recycled-based fiber business," said Keith Phillips, Wellman's CFO, in a statement,



Exel reports Q3 net loss in sales


Exel reported a third-quarter operating loss of EUR 2.1 million (USD $3.0 million), or 7.4 percent of net sales compared to EUR 1.0 million (USD $1.4 million) last year, hit by write-offs and impairment of assets that cost EUR 4.2 million (USD $6.0 million).

Net sales in the third quarter were up to EUR 27.9 million (USD $40.3 million) from EUR 28.5 million (USD $41.1 million) in the same period last year.

Net sales in the first nine months increased to EUR 85.4 million (USD $123.3 million), up 4.1 percent over the corresponding period previous year. Operating profit in the first nine months was EUR 4.1 million (USD $5.9 million), or 4.8 percent of net sales. Earnings per share in the first nine months were EUR 0.17 (USD $0.24), adjusted for full dilution

The Sport Division's net sales in the first nine months decreased to EUR 9.7 million (USD $14.0 million), down 32 percent from the previous year's EUR 14.3 million (USD $20.6 million). Operating loss in the first nine months was EUR 7.6 million (USD $10.9 million). Exel said sales were hit by continuing problems with delayed deliveries from China, as well as lack of delivery capacity in Finland. It added that it is taking measures to reduce inventory level and changed its sales organization to improve selling capacity.

The Industry Division's net sales in the first nine months increased to EUR 79.5 million (USD $114.8 million), up 2.4 percent from the previous year. Operating profit in the first nine months was EUR 11.3 million (USD $16.3 million).

(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. 30.)

Big 5 Q3 earnings rise on higher revenue

Big 5 Sporting Goods' (Nasdaq: BGFV) third-quarter profit rose 7 percent, helped by higher sales and savings from a new distribution center.

Net income rose to $8.4 million, or $0.37 per share, from $7.8 million, or $0.34 per share in the prior-year quarter. Revenue rose 4 percent to $231.3 million from $223.3 million in the year-ago quarter. Same-store sales edged up 0.2 percent.

The company previously predicted earnings per share between $0.27 and $0.35 per share for the quarter. It noted results were helped by lower distribution-center costs due to operational efficiencies at the company's new distribution center.

But Big 5 offered a fourth-quarter earnings guidance range mostly below analyst estimates. The company predicted earnings between $0.36 and $0.46 per share for the quarter, while analysts predict a profit of $0.42 per share. Big 5 expects same-store sales growth to be in the negative low single digits to the positive low single digits.

For the year, Big 5 expects earnings between $1.33 and $1.43 per share, while analysts expect a profit of $1.32 per share. The company expects same-store sales growth in the same range as the fourth quarter. It said full-year guidance reflects lower distribution center expenses offset by a reduction in inventory cost capitalization and higher administrative expenses.



Kellwood elects new board member


Kellwood Company (NYSE: KWD), parent of Sierra Designs and Kelty, has elected Robert (Bob) Siegel to the company's board of directors, effective Nov. 1, succeeding Robert Baer who retired from the board in June 2007. Siegel is currently the chairman, president and CEO of Lacoste-USA, and will become a member of Kellwood's compensation committee.

Liberty increases buyback by $1 billion

Liberty Media Corp. (Nasdaq: LINTA), parent of Backcountry.com, said its board approved the repurchase of up to an additional $1 billion of Liberty Interactive common stock. The buybacks will be made using Liberty's cash resources.

The approval raises to $3 billion the total amount approved for repurchase since Liberty Interactive stock began trading in May 2006. Liberty had repurchased about 98.7 million shares at an average cost of $20.15 per share for about $1.99 billion as of late October.

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