Updated from 11:28 a.m. EDTTimberland (TBL) reported an increase in second-quarter earnings, citing solid sales, an improvement in gross margins and the weak dollar. But its shares took a tumble.
In the quarter ended June 27, the company earned $5.8 million, or 16 cents a share, compared with $4.9 million, or 13 cents a share, in the prior-year quarter. Revenue was $211.7 million, up 10.5%, but slightly short of the $212.09 million analysts had expected. Excluding currency effects, sales rose 5%.
The company said its international markets had double-digit revenue growth followed by modest U.S. growth. Domestic revenue rose 2.6%. International revenue gained 25.8% to $82.6 million, compared with $65.7 million in the prior-year period. On a constant dollar basis, international revenue increased 10.4%, the company said.
Nonetheless, shares of the Stratham, N.H.-based company were down 13% at $49.95 early Friday afternoon.
Raymond Jones, analyst at Delafield Hambrecht, said Timberland had raised its revenue and earnings expectations for the second quarter after "they blew me away in the first quarter." The company had earned 53 cents a share in the first quarter, up from 23 cents a share in the year-ago quarter. The more subdued second quarter may have something to do with the stock's dropping, he said.
Jones added, "International sales were strong but could have been stronger. Other companies have experienced better results."
Worldwide wholesale revenue for the quarter was $149.4 million, 10.7% higher than the $134.9 million reported for the second quarter of 2002.
"Our financial results reflect gains across global markets and reinforce that we are on track toward delivering solid revenue and earnings gains in 2003," said Chief Executive Jeffrey B. Swartz. He also expects mid single-digit revenue growth in the second half of 2003.