Head N.V. was able to use its reporting structure in U.S. dollars to its advantage once again in the third quarter, but company management indicated that the benefit had declined a bit since the first half of the year. The company reports in U.S. currency although they are based in Europe and did 58% of their business in the region in Q3, up from 54% in Q2 2002.

North America made up 29% of the business in Q3 versus 32% in the year-ago period. The Rest of World region made up the balance of the business in Q3 2003.

Measured in the home region’s Euro currency, Head’s third quarter sales would have actually declined 5.1% versus the 12.1% increase reported. European sales rose just 1.9% in Euros versus the reported 20.4% jump reported in U.S. currency.

Winter Sports, which sees 90% of its sales in the back half of the year, saw good growth across its four main categories for the nine-month YTD period. Sales for the period were up 30.4% to $82.4 million from $62.2 million in the YTD 2002 period.

The gains were not all based on currency either, as unit sales in bindings increased 21%, boots grew 14.3%, snowboards jumped 38.6%, and skis gained 9.4%.

The improved results here seem to run counter to recent studies of the market. According to a recent GfK Marketing Services study, alpine ski sales are on the decline worldwide. According to the report, sales volume has shrunk by 11.1%, down 300,000 units out of 4.2 million units sold yearly.

According to Head, “On the basis of this and other marketing data, the industry expects order bookings for calendar 2003 to remain static at best.”

Gross Margins at the winter sports division are not following the same upward curve as the sales numbers, due in large part to a change in the product mix in the division this year and also the negative currency impact of costs that are largely incurred in Euros.

Note –Look for more detail on Head’s Winter Sports business in SEW’s sister publication, The B.O.S.S. Report, which covers the Bicycle, Outdoor and SnowSports markets.

Racquet Sports sales gains were said to be due primarily from higher sales of tennis racquets, and more specifically the new Liquidmetal series that launched in July. The company expects to see this momentum carry over into fourth quarter.

North America and Europe both saw nice gains from the new technology, with the U.S. increasing almost 28% in the third quarter and Europe gaining 8.0% in Euros. On a dollar basis, The U.S. now makes up 47% of Head’s Racquet Sports business, down from 51% in Q3 last year. Europe was 41% of sales, up from 37% in the year-ago period.

The company said that Liquidmetal racquets are ranked in the two, three and four position in U.S. specialty pro shops. Head sold 449,000 tennis racquets in Q3, up 1.4% from the year-ago period. Racquets represent 52% of sales for the division, while Balls make up 34% of sales. Ball sales were said to be “up slightly” as well.

Head said gross margins here were impacted by the “soft premium segment of the market” as well as currency exchange issues and the timing of the Liquidmetal launch. The Liquidmetal racquets were launched with fewer models and later in 2003 than Head’s higher price point models that were launched in 2002. Total tennis racquet bookings are flat to last year’s numbers.

Diving, which sees 59% of its business coming out of the Europe market actually declined 11.3% when measured in Euros. The European business inched up 0.7% in Euros, while the North America business fell 18.2% on a U.S. dollar basis.

Editor’s note — All regional figures and FX conversions are approximate numbers based on percentages supplied by Head.