We made a tongue-in-cheek projection in last weeks SEW that — due to the proliferation of minor press releases put out by the company the previous week-Oakley, Inc. was going to have one doozey of an earnings report for Q4 and full-year 2002.
Well, they didnt disappoint us, but they had one heck of a negative effect on their shareholders as OO shares dropped 17.3% for the week to close at less than $8.00 for the first time in almost three years.
OOs fourth quarter earnings plunged 85%, primarily on a European restructuring charge. The company posted Q4 profits of $487,000, or a penny a share, down from $3.3 million, or 5 cents a share, a year earlier. Excluding the $1.8 million charge, OO earned 3 cents.
Sales in Q4 increased 14%, due to 24% growth in International sales. Domestic sales dropped 7.4% to $36.1 million, excluding retail store operations. Sales in the “Apparel and Other” category rose 26.1% to $30 million. Total sales for the period reached $102.9 million, up from $90.2 million a year ago.
Gross margins fell 190 bps to 53%, reflecting a decline in sunglass volumes and a greater contribution from lower gross margin categories.
Backlog at the end of the year was $42.7 million, up 16.3% from a year earlier. Spring footwear and apparel futures grew 18.9%.
Oakley said retail trends through early February remain challenging and would not reaffirm previous Q1 guidance that called for results similar to Q4. The company said that meeting the first quarter estimates will depend on the success of new sunglasses scheduled to come out in March, a month that typically accounts for more than 40% of the company’s Q1 sunglass sales.
The company did affirm its 2003 outlook issued last month, for earnings of 55 cents to 60 cents a share, with revenue growing 15% to $560 million. The company has cut its outlook three times since early fall.
- Net sales grew 14% to $489.6 million
- Net income off 10% to $42.4 million ($0.61 EPS)
- U.S. sales up 19.2% to $254.0 million
- Oakley retail stores grew 267.1% to $32.6 million
- Intl net sales increased 9.0% to $235.5 million
- Sunglass sales increased 9.5% to $330.2 million
- Sunglass average selling price increased 9.8%
- “Other” categories 25.3% of biz vs. 22.4% in 01
- Apparel gross sales increased 49.3% $56.6 million
- Footwear gross sales grew 4.0% to $31.2 million
- Watch gross sales increased 41.5% to $11.6 million