原文：Timberland Sees Net Income Down 33.4% on Sales Decline
The Timberland Company recorded fourth quarter net income $24.1
million and diluted earnings per share (EPS) of 40 cents. Fourth quarter
diluted EPS was 52 cents when adjusted to exclude restructuring and
related costs. These results compare to fourth-quarter 2006 net income
of $36.2 million and diluted EPS of 58 cents, or 61 cents when adjusted
to exclude restructuring and related costs.
原文：Q1 Tourism Spending Declines by 3.7%
Timberland also announced today that it has taken several additional
actions to streamline its global operations which will result in
incremental operating expense savings of $30 million. These actions,
when combined with the company’s previously announced decisions to
license its U.S. apparel business, close underperforming retail stores
and reorganize its U.S. sales and global product organizations, will
result in $65 million of annual operating expense savings. The company
plans to invest incrementally in consumer-facing marketing spend,
international expansion and other growth initiatives resulting in a
recalibrated operating expense base for 2008 in the range of $550
Real spending on tourism, or spending adjusted for inflation – decreased
at an annual rate of 3.7% in the first quarter of 2008,
indiCATing the travel and
recreation industry is being hurt worse than the economy as a whole by
declining consumer confidence and rising gas prices, data released
Wednesday by the Bureau of Economic Analysis show.
Fourth-Quarter Results Summary:
The decline reflected a steep drop in spending on accommodations and
passenger air transportation. The BEA also revised its estimates of real
spending on tourstim for the fourth quarter of 2007 to an increase of
2.3 %. By comparison, real gross domestic product (GDP) grew at an
annual rate of 0.9 % (preliminary) in the first quarter and 0.6 % in the
fourth quarter of last year.
Revenue fell 9.3% to $442.7 million as declines in boots and kids’
footwear and decreases in Timberland apparel revenue in the U.S. offset
strong gains in SmartWool products,
Timberland casual and Timberland PRO series footwear.
FoREIgn exchange rate changes
increased fourth-quarter 2007 revenues by approximately $13 million, or
2.6%, due to the strength of the Euro and the British Pound, and
increased operating income by approximately $3 million.
Real spending on accommodations turned down sharply,
decreASIng 10.8% in the first
quarter after increasing 12.1% (revised) in Q4 of 2007. Real spending on
passenger air transportation also turned down, decreasing 5.6 % in the
first quarter after increasing 2.1% at the end of 2007.
International revenue increased 5.0% to $184.1 million, but
decreased 2.2% on a constant dollar
bASIs. U.S. revenues declined 17.3%
to $258.6 million, as soft retail conditions added to pressures on boots
and kids’ sales.
Prices for accommodations increased 0.9% in Q1 after declining 1.9% in
the previous quarter. Prices for passenger air transportation
accelerated, increasing 4.7% in the first quarter after increasing just
1.3 % (revised) the previous quarter.
Apparel and accessories revenue grew 2.6% to $133.5 million, driven
by double-digit growth of SmartWool socks and apparel. These gains
offset declines in Timberland brand apparel, as the company has
experienced soft retail response while it transitions its North American
apparel business to a licensing arrangement. Global footwear revenue
fell 14.1% to $304.4 million as declines in boots and kids’ sales offset
gains in casual footwear and the Timberland PRO series.
Real spending on recreation and entertainment slowed further, declining
6.6 % in the first quarter after declining 3.6 % (revised) in the fourth
Global wholesale revenue decreased 14.9% to $289.3 million
reflecting declines in boots and kids’ sales. Worldwide consumer direct
revenue increased 3.4% to $153.4 million, as global door expansion was
partially offset by a 6% comparable
store sales decline.
Prices for all tourism goods and services continued to increase steadily
Restructuring and related charges of $9.6 million in the fourth
quarter included $6.7 million for severance and related costs associated
with Timberland’s initiative to rationalize its operating expense
structure and transition to a more efficient global organization. The
remaining $2.9 million of restructuring and related charges in the
fourth quarter relate to lease termination and severance costs from the
company’s decision to close certain retail
- 4.8% in Q1 of 2008, 4.8% in Q4 of 2007 and 4.7% in Q3 of 2007.
Operating income for the quarter was $32.4 million, down 44.2% from
$58.0 million in the prior year. Operating income excluding
restructuring and related costs was $42.0 million, 31.3% below the
comparable prior year level. Profit declines reflected the revenue
declines as well as gross margin pressures from higher levels of
off-price sales and markdowns and increased product costs, which offset
a 5% reduction in operating expenses excluding restructuring and related
costs. During the fourth quarter, the company reversed approximately $8
million in accruals, primarily related to incentive compensation as its
annual operating performance fell below minimum requirements.
Retail shopping by TRAVELERs grew
slightly in the first quarter.
For the fourth quarter 2007, the tax rate was 24.3%, due to the
release of approximately $8 million of specific tax reserves related to
the closure of certain audits during the quarter as anticipated. The
full-year tax rate was 33.0%.
In connection with its continuing stock buyback program, Timberland
repurchased approximately 1.1 million shares in the fourth quarter at a
total cost of $19.4 million. It ended the year with $143.3 million in
cash and no debt. Inventory at quarter end was $201.9 million, up 8.1%
versus 2006 fourth-quarter levels. Accounts receivable decreased 7.8% to
For the full-year 2007, Timberland reported net income of $40.0
million and diluted EPS of 65 cents, or 92 cents when adjusted to
exclude restructuring and related costs. These results compare to
full-year 2006 net income of $101.2 million and diluted EPS of $1.59, or
$1.63 when adjusted to exclude restructuring and related costs.
For 2008, Timberland is targeting low-single digit revenue declines,
operating expenses in the range of $550 million and flat to modest
operating margin improvement excluding restructuring costs, compared
with 2007 comparable results. As defined, 2007 comparable results
exclude $24.7 million in restructuring and related costs, and
approximately $30 million in revenues associated with stores targeted
for closure that generated an operating loss of approximately $2
million. The company believes that actions taken to rationalize its
operating expense structure should offset continued soft market trends.
Timberland anticipates its full year 2008 tax rate to be in the range of
The company continues to target mid-single digit revenue declines
and improved operating contribution excluding restructuring costs for
the first half of 2008, compared with 2007 first half comparable
results. As defined, 2007 first-half comparable results exclude $7.5
million in restructuring and related costs, and approximately $8 million
in revenues associated with stores targeted for closure that generated
an operating loss of approximately $2 million. Timberland also
anticipates an additional $6 million in restructuring costs to be
incurred in the first half of 2008 for charges associated with its
retail closure plan and now believes total plan costs will be in the
range of $16 million, slightly below its initial estimate.
Jeffrey B. Swartz, Timberland’s president and CEO, stated, “2007 was
a disappointing year for Timberland, and the results that we delivered
to shareholders are below standard and unacceptable for an authentic
brand with a deep and unique connection to consumers. However, during
the year we made difficult decisions to simplify our business, including
licensing our North American apparel business, closing underperforming
retail stores globally and streamlining our global operations; actions
that should enhance profitability going forward. Now we begin 2008 with
a clear sense of where our strategy has missed the mark and a plan to
address the chAllenges we are
confronting as we rebuild Timberland’s strong relationship with
consumers. We believe we are well positioned to compete in a challenging
and uncertain business environment as we ended the year with no debt and
a strong balance sheet.”