After Oakley saw its Q4 sales gain fail to translate to the bottom line, management unveiled several initiatives that it hopes will help achieve sustainable revenue growth, improved long-term earnings growth, and return on investment.
“Oakley's sales have nearly tripled from $232 million in 1998 to a record $648.1 million in 2005,” said Scott Olivet, chief executive officer, Oakley, Inc. “However, our earnings and return on investment have not kept pace. As a starting point, we will articulate a preliminary multi-year financial model and embark in 2006 on a set of strategies to realign and refocus our businesses to position us for profitable growth.”
The four initiatives include refocusing the company on optics; realigning the apparel platform; exiting a significant portion of the footwear business; and increasing investments in brand development.
In other Oakley news, the company acquired the privately-held Oliver Peoples, Inc., and its subsidiaries, Oliver Peoples, Mosley Tribes, and the licensed Paul Smith eyewear brand.
The acquisition's aggregate purchase price of up to $55.7 million, subject to post closing adjustments, includes the assumption of approximately $5.0 million of debt and up to $4.0 million in earn-out incentives. Oakley expects the acquisition to be slightly accretive to earnings in 2006.
