The Timberland Company reported that the total International business has exceeded a half billion dollars for the year to 40% of total sales and the brand drafted off of favorable winter weather in the Northeast U.S. in Q4 to post double-digit gains worldwide for the quarter.
Total fourth quarter revenue increased 16.4%, or 13% in constant dollars, to $415.3 million, driven by a 21% gain in global footwear sales. Favorable foreign exchange rate changes also added $12.9 million to overall revenue growth. The Consumer Direct business grew 17.4% to $137.7 million and the Wholesale business increased 15.8% to $277.7 million for the quarter.
The U.S. Consumer Direct business increased 11.2% to $86.7 million and comparable store sales gained 5.9% for the quarter. The U.S. Wholesale business grew 11.1% to $204.5 million, driven by gains in boots and other footwear categories, but also saw a decline in wholesale apparel which was impacted by “lower levels of off-price sales and higher levels of customer allowances in the competitive market environment”.
The International markets jumped 30.7%, or 17.1% in constant dollars, to $124.2 million, or 27.7% of total sales on a constant dollar basis. Europe saw double-digit constant dollar gains in Europe and Asia. The Europe business benefited from “strong gains in developed markets such as the U.K. and Italy” and double-digit growth in Germany, Spain and France.
Global footwear revenue grew 20.7% to $320.3 million, driven by strong growth in boots, men's and women's casual, kids' and outdoor performance categories. Global apparel and accessories revenue grew 2.9% to $91.0 million, driven by gains in the Asian business, which offset declines in European apparel impacted by comparisons to strong prior year performance.
Gross margin for the quarter was up 540 basis points to 47.3% versus 41.9% in the year-ago quarter. Foreign exchange also added approximately 70 basis points to gross margin. The West Coast port work stoppage impacted margins in Q4 last year and margins would have improved 300 basis points without the impact of the stoppage and the FX rate gain. Net income for Q4 widened 45.8% to $39.5 million, or $1.10 per diluted share, compared with net income of $27.1 million, or 73 cents per diluted share, in fourth quarter 2002.
For the full year, Timberland posted revenue of $1.34 billion, up 12.7% versus the prior year, or up 8.0% in constant dollars. On a constant dollar basis, International revenues increased 13.6%. Canada finished its first full year of operation as a direct subsidiary and added “approximately 2%” to International growth.
Wholesale backlog at year-end was up 16%, or 7% in constant dollars, to $332 million.
The company sees “mid- to high-single digit revenue growth” in 2004, including benefits from FX rates that are estimated to add approximately 3% to revenue growth and 150 basis points to gross margins.
