Timberland Reports Second Quarter 2011 Results
The Timberland Company (NYSE: TBL) today announced second quarter revenue of $240.1 million, a 27.1% increase compared with revenue of $189.0 million for the same period of 2010. Second quarter net loss was $20.1 million, or $(0.39) per share, compared with a net loss of $23.5 million, or $(0.44) per share, for the same period of 2010.
Second Quarter Results:
- Revenue increased 27.1% compared to the prior year period and was up 20.6% on a constant dollar basis, reflecting strong growth across North America, Europe, and Asia.
- North America revenue increased 15.4% to $106.1 million compared to the prior year period, led by growth from Timberland® footwear and Timberland PRO® footwear, as well as SmartWool® accessories. Europe revenue increased 37.4% to $91.7 million, 24.6% on a constant dollar basis, led by significant growth in the wholesale channel, growth in comparable store sales, and new store openings. Asia revenue increased 40.0% to $42.3 million compared to the prior year period, and increased 28.1% on a constant dollar basis, due to double-digit growth in each of the major markets, strong growth in comparable store sales, and retail expansion.
- Global footwear revenue increased 28.2% to $168.7 million from the second quarter of 2010, led by strong growth in men’s footwear in both wholesale and retail channels across all geographic regions. Apparel and accessories revenue increased 26.8% to $66.0 million, reflecting growth across all regions as well, with Europe wholesale accounts and Asia retail stores driving growth in apparel and SmartWool driving growth in accessories.
- Global wholesale revenue was up 28.7% to $151.1 million compared to the prior year period, driven by double-digit growth in North America, Europe, and Asia. Worldwide consumer direct revenue increased 24.5% to $89.0 million compared to the second quarter of 2010, driven by strong comparable store sales growth and the net addition of sixteen new stores compared to the second quarter of 2010.
- Operating loss for the second quarter of 2011 was $30.9 million, compared to an operating loss of $33.3 million in the prior year period. Gross margin declined 210 basis points to 47.4%, with higher product costs more than offsetting favorable foreign exchange impacts. The Company expects higher product costs to continue through 2011; however, the Company expects a positive impact from strategic price increases in the back half of the year. Operating expense for the second quarter of 2011 was $144.7 million, an increase of 14.1% compared to the prior year period.
- In the second quarter of 2011, the effective tax rate was 32.4% compared to 29.0% in the second quarter of 2010.
- The Company ended the quarter with $233.8 million in cash and no debt. Accounts receivable increased 34.4% to $116.7 million compared to the prior year period, driven by revenue growth and the timing of sales. Inventory at quarter end was $251.7 million, an increase of 42.0%, driven by expected growth for the business in 2011, increased product costs, and efforts to secure product in advance of potential factory capacity constraints.
As previously announced, the Company will not be hosting a conference call to discuss second quarter results. Replays of previous quarters’ conference calls are available through the investor relations section of the Company’s website.
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