STRATHAM, N.H. -- The Timberland Company (NYSE: TBL) today reported first-quarter 2008 net income of $18.0 million and diluted earnings per share (EPS) of $0.30. First quarter diluted EPS was $0.31 when adjusted to exclude restructuring and related costs. These results compare to first-quarter 2007 net income of $9.3 million and diluted EPS of $0.15, or $0.22 when adjusted to exclude restructuring and related costs.
First-Quarter Results Summary:
* Revenue grew 1.2% to $340.4 million as foreign exchange rate changes, strong christian dior shoes gains in SmartWool([R] )products and Timberland PRO([R])series footwear and moderate growth in Timberland([R])casual footwear offset declines in boots and kids' footwear and decreases in Timberland([R]) apparel revenue in North America. Foreign exchange rate changes increased first-quarter 2008 revenue by approximately $16 million, or 4.8%, due to the strength of the Euro and the British Pound, and increased operating income by approximately $6 million.
* North America revenue declined 4.7% to $137.7 million, or 5.1% on a constant dollar basis, reflecting soft consumer spending in both the U.S. and Canada. Europe revenue increased 6.9% to $164.8 million driven by gains in foreign currency, but decreased 1.6% on a constant dollar basis. Asia revenue increased 0.7% to $37.9 million driven by gains in foreign currency, but decreased 6.3% on a constant dollar basis. Geographic results reflect the introduction of new reporting segments, a change that the Company believes will better reflect the way it now manages its business.
* Apparel and accessories revenue increased 2.7% to $97.9 million compared to $95.4 million in the first quarter of 2007, driven by double-digit growth of SmartWool([R])socks and apparel. These gains offset declines in Timberland([R] )brand apparel in North America. In February 2007, the Company announced that it would transition this business to a licensing arrangement with Phillips-Van Heusen, beginning with the launch of men's apparel in time for Father's Day 2008. The Company will cease sales of in-house North American casual apparel product in the second quarter of 2008 but will continue selling its own line of apparel in International markets. Global footwear revenue was $236.6 million, up slightly compared to the prior year as gains in casual and the Timberland PRO([R]) series footwear offset declines in boots and kids' footwear.
* Global wholesale revenue decreased 1.5% to $255.5 million. Worldwide consumer direct revenue increased 10.2% to $84.9 million, driven by comparable store sales gains of 5.7%.
* Restructuring and related charges were $0.6 million in the first quarter of 2008, compared to $6.5 million for the first quarter of 2007.
* Operating income for the quarter was $23.2 million, up 70.7% from the prior-year period. Operating income excluding restructuring and related costs replica Breguet Fashion was $23.8 million, 18.1% above the comparable prior year level. Profit increases reflect benefits from foreign currency translation as well as a 5.4% reduction in operating expenses excluding restructuring and related costs.
* For the first quarter 2008, the tax rate was 39.0% compared to 34.5% for the first quarter of 2007. This increase in the effective tax rate resulted from a change in the geographical mix of profits.
* In connection with its continuing stock buyback program, Timberland repurchased approximately 668 thousand shares in the first quarter at a total cost of $9.6 million. It ended
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