Based on results for the fourth quarter and full year 2002, Saucony is already starting to reap the benefits of the strategy the company put in place in mid 2001 to right-size the business and focus on its core consumer.

A December surprise from its domestic business in both deliveries and expenses netted much higher earnings than originally anticipated. As recently as early December, SCNY estimated that it would “meet or exceed” previous guidance of 2 cents to 4 cents in Q4 EPS. They exceeded it all right, reporting a head-turning 13 cents per share ($806,000) profit for the quarter. SCNY lost $2.8 million in Q4 2001.

Net sales for Q4 increased 31% to $28.2 million, Domestic sales gained 30% to $21.8 million and International jumped 34% to $6.4 million. Saucony brand footwear was about 80% of Q4 net sales, with Hind apparel and factory outlet stores making up the balance.

The company has cleared the floor of much of the inventory overhang from previous years and is relying less on closeouts and Originals to post much higher margins and profits.

Gross margin for Q4 rose 450 bps to 33.6% as SCNY moved technical goods through the pipeline as a higher percentage of total sales.

Reduced SG&A also played a big role in the surprise numbers as the company reduced selling expenses to 11.4% of sales compared to 17.1% last year’s Q4.

Domestic sales were lower for the year due to the reductions in off-price, but GM was up 250 bps to 34.4%.



    • Net sales increased 1% to $133.2 million.
    • Domestic net sales decreased 3% to $103.4 million
    • Int’l net sales increased 16% to $29.8 million.
    • Net income was $5.2 million, or $0.85 EPS, compared to 2001’s loss of $940k, or -$0.15 per share.


    • On 1/3 up 14% to $46.1 million through May
    • Total 1/3 backlog up 23% to $52.4 million
    • End January backlog up 11%

    2003 ESTIMATES

    • Q1 EPS to range from $0.26 to $0.28
    • Full year EPS in the $0.93 to $1.00 range
    • Q1 net sales of $36 million to $37 million
    • Full year net sales of $139 million to $142 million

>>> Based on the hard lessons learned here over the last two years, we doubt we’ll see SCNY chasing the Foot Locker fashion business again anytime soon…