Stride Rite Corporation saw Q1 2003 net income rise 17% to $8.8 million on solid sales gains for its Keds, Sperry Top-Sider, and Tommy Hilfiger footwear lines. Earnings per share for the quarter ended February 28, 2003 were 22 cents, up from 18 cents for Q1 2002.
Total sales increased 8.0% to $152.3 million, with Hilfiger Footwear sales jumping 37%, Keds up 7.0% and Sperry Top-Sider gaining 15%. Sales of Stride Rite branded product-sold mostly through its own stores — rose 2%.
Sales at Stride Rite Children’s company-owned stores were flat while sales to independent retailers increased 4%. Keds free standing stores have “not met initial expectations”.
The increase in Hilfiger was based on expansion of distribution into value channel shoe chains and easy comparisons. TH Footwear is now capitalizing on brand strength at Shoe Carnival, Shoe Show, and Stage Stores and expects to continue expansion in the channel on a calculated timeline for growth. The Mid-Market Department Store growth is only limited by Hilfiger USAs apparel strategy in the channel.
The Keds growth came from “solid trade acceptance” on new products.
Gross Margin was 38.1% for the quarter, gaining 130 basis points on “lower inventory obsolescence, product returns and markdown allowances”. Operating expenses were up 11% caused by the aggressive expansion of company owned stores
SRR issued guidance for the current fiscal year, saying it expects EPS to be in the 60 to 64 cents range.