Footwear marketer Timberland's Q2 revenues up 4.4%
26 Jul '05
5 min read
- Operating profit for the quarter decreased 30.4% to $8.4 million. Moderate gross profit gains were offset by higher growth in operating expenses, in part reflecting investments in international retail infrastructure and global organizational capability over the past year.
Operating margin decreased 170 basis points to 3.5%, impacted by higher levels of off-price sales and product mix impacts in the Company's U.S. business. For the quarter, foreign exchange rate changes contributed approximately $0.5 million to operating profit.
EPS for the quarter decreased $0.02 to $0.09. Despite anticipated pressure on second quarter results, Timberland delivered record profit levels for the first half of 2005 - with operating profits up 18% and diluted EPS up 31% versus the prior-year period.
- During the quarter, the Company continued to support its share repurchase program, buying back 1.0 million shares at a total cost of $37.2 million. The Company currently has 2.6 million shares remaining under its existing share repurchase program, which was increased in conjunction with its 2-for-1 stock split on May 2, 2005.
- Timberland ended the quarter with $189.8 million in cash and no debt outstanding. Timberland's strong recent earnings growth and disciplined approach to asset management supported an increase in annual return on capital from 31.0% to 32.3%.
Timberland's inventory at the end of the second quarter of 2005 was $216.5 million, 26.6% higher than at the end of the 2004 second quarter. As previously disclosed, second quarter 2005 reflected the Company's conversion to new sourcing arrangements with independent suppliers, resulting in an earlier transfer of title for certain third party shipments.
marketing@alchempro.com
