The Stride Rite Corporation just got over the profit line in the fourth quarter, managing to pull out net income of just $51,000, or zero earnings per share. Still, it was a swing to profit from Q4 last year when SRR posted a net loss of $965,000, or two cents per diluted share. Total sales for the company increased 12.6% to $116.8 million, compared to $103.8 million in the year-ago period. Gross margins were up 190 basis points to 38.4% in the fourth quarter.
The Stride Rite Children’s Group reported a 17% increase in sales in the fourth quarter and a 7% increase for the year. Company-owned retail stores saw sales increase 23% for the quarter and 12% for the year, due in part to the addition of an extra week of sales in 2004. Comp store sales rose 8.2% in Q4 and 6.9% for the year. SRR reported that Children’s Group wholesale sales to independent retailers increased 5% during the fourth quarter, but were flat for the year.
Sperry Top-Sider footwear sales increased 40% in the fourth quarter and 10% for the full fiscal 2004 year. Management said gains were seen across the range in Boat Shoes, Womens, and Casual.
Keds returned to positive territory in the fourth quarter, posting a 4% sales gain versus Q4 last year. Keds full-year sales decreased 11% versus last year. The Kids portion of Keds saw a 7% gain for the year and is expected to see more take-downs in 2005. Management said they see 2005 as a turnaround year for the division.
Tommy Hilfiger footwear sales decreased 6% in the fourth quarter and 3% for the full year compared to the same periods in fiscal 2003, again due primarily to the weakness in Mens Athletic and Casual. Management sees little turnaround hope here until the back half of 2005.
For 2005, management said that, “assuming reasonable market and economic conditions in 2005,” they we are projecting 5% to 10% earnings growth on a 3% to 5% increase in revenues.