Outdoor financials: VF shares fall despite analyst upgrade, plus Garmin, Johnson Outdoors, Eddie Bauer

VF shares fell despite an analyst upgrade, Garmin said it would acquire a Swedish distributor, Johnson Outdoors declared a quarterly dividend, and Eddie Bauer appointed two VPs.
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VF shares fell despite an analyst upgrade, Garmin said it would acquire a Swedish distributor, Johnson Outdoors declared a quarterly dividend, and Eddie Bauer appointed two VPs.

VF shares fall despite analyst upgrade

VF Corp. (NYSE: VFC) shares took a hit on Oct. 2 -- along with the broader market -- despite positive comments from an analyst following the company's investor day meeting.

Citi Investment Research analyst Kate McShane said the analyst meeting on Oct. 1 was "relatively upbeat," as the company said key drivers for the company's outdoor coalition -- which includes strong selling brands The North Face and Vans -- include product extensions, retail growth and international expansion going forward.

She reiterated her "Buy" rating and $97 price target on the company.

"VF continues to deliver in a difficult macro environment, driven, in our view, by its strong brand portfolio, diversified distribution strategy, sourcing leverage and solid management execution," she wrote.

However, shares fell, likely due to an overall drop in the market. The Dow Jones Industrial Average dropped 300 points in morning trading after the government reported the number of people seeking unemployment benefits rose last week to a seven-year high and factory orders fell the largest amount in nearly two years.

VF shares gave up $3.06 to close at $73.24. The stock has traded between $63.68 and $87.36 during the last year.

Garmin to acquire Swedish distributor; downgraded by analyst

Garmin (Nasdaq: GRMN) said it has signed a letter of intent to acquire Sportmanship International AB, the distributor of Garmin's consumer products in Sweden. Terms of the deal were not disclosed.

Min Kao, chairman and CEO of Garmin, said Sportmanship has made Garmin a market leader in Sweden in portable navigation devices. "We anticipate that the acquisition of Sportmanship will further consolidate and expand our market-leading position in Sweden and the Nordic countries as a whole," he said in a statement.

Following the acquisition, Sportmanship is expected to change its name to Garmin Sweden AB. The company will keep its management, sales, marketing and support staff of about 28 employees, Garmin said.

If successful, it will be Garmin's second acquisition in about two months. It announced July 31 that it completed the acquisition of its Austrian distributor Puls Elektronik GmbH.

In other news, RBC Capital Markets downgraded Garmin to "underperform" from "sector perform," citing pricing pressure, lower volume due to the weakening consumer demand and reduced confidence in nuvifone, the company's smartphone, sending its shares to a three-year low.

"We have increased concerns about the holiday season and we expect increased competition for Garmin from both other personal navigation devices (PND) manufacturers as well as other consumer electronics," analyst Mark Sue said in a note to clients.

The analyst halved his price target to $20 on the shares of Garmin.

“PND pricing was down about 25 percent in the second quarter and we are currently modeling a similar year-over-year decline in the second half of 2008,” Sue wrote. Every further 1 percent decline for the remainder of the year will cost the biggest U.S. maker of navigation devices 6 cents in earnings, he added.

In July, Garmin further delayed the launch of nuvifone to the first half of 2009 and said meeting some of the carrier-specific requirements will take longer than anticipated.

"Nuvifone success seems less likely with each passing day. We are concerned about the limited market size for navigation-centric smartphones and that the competition may have erased any lead that Garmin had," the analyst wrote.

Johnson Outdoors declares quarterly dividend

The board of directors for Johnson Outdoors (Nasdaq: JOUT) has approved a quarterly cash dividend of $0.055 per Class A share and $0.05 per Class B share. The dividends are payable Oct. 30 to shareholders of record on Oct. 16.

Johnson Outdoors' portfolio includes Old Town, Ocean Kayak and Necky, among others.

Eddie Bauer appoints two VPs

Eddie Bauer Holdings (Nasdaq: EBHI) said it has appointed Scott Hutsenpiller as vice president of outerwear design and Jean Park as divisional vice president of men's merchandising.

Hutsenpiller is an award-winning design director with over 15 years experience as a senior designer. Most recently, he was responsible for the design of two alpine ski collections for Spyder Active Sports. He has also worked for Eastern Mountain Sports, Nike and Patagonia.

Park has extensive experience as a men's merchant and has spent over 10 years in the industry. She has held a variety of roles with Levi Strauss & Co, most recently as director, men's and boy's merchandising.

As an inducement to join the company, Hutsenpiller was given 4,250 restricted stock units that will become 100 percent vested at the conclusion of four years of service, and options to purchase 12,750 shares of the company's common stock. Park was granted 2,500 restricted stock units with the option to buy 7,500 shares of the company's common stock.

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