The Timberland Company reported that first quarter net income increased 35.7% to $42.2 million, or $1.22 per diluted share, compared net income of $31.1 million, or diluted EPS of 87 cents per share, in the year-ago quarter. Net revenue increased 10.1% to $354.2 million, driven by gains in both U.S. and international markets.

U.S. revenues grew 4.0%, reflecting solid growth in footwear and apparel – and gains in both wholesale (+4.9%) and retail channels (+1.4% on a 3.9% comparable store sales gain).

International results (+15.3% or +11.0% in constant dollars) were driven by strong constant dollar sales gains in Europe and Asia. Global retail comparable store sales increased 5.4%, reflecting gains in both U.S. and international markets. Overall revenue growth benefited from favorable foreign exchange rate changes – which added $7.4 million (or 2.3%) to first quarter 2005 revenue.

First quarter results were supported by strong global footwear sales. Global footwear revenues expanded 11.1% to $266.0 million, driven by growth in boots, kids', men's casual and Timberland PRO(R) series footwear. Global apparel and accessories revenue grew 6.7% to $84.6 million, reflecting gains in U.S. and international markets.

Operating profit for the quarter increased 29.7% to $61.9 million. Operating margin increased 260 basis points to 17.5%. Profit gains reflected strong revenue growth, benefits from favorable foreign exchange hedge rate changes and disciplined cost management. For the quarter, foreign exchange rate changes contributed approximately $5.7 million to operating profit.

EPS for the quarter expanded 40.2% to $1.22, reflecting profit gains and continued benefits from share repurchases. During the quarter, the Company repurchased 619 thousand shares at a total cost of $41.9 million. The Company currently has 1.8 million shares remaining under its existing share repurchase program. This authorization will be increased by 100% on May 2, 2005, which is the distribution date of the Company's previously announced 2-for-1 stock split.

Timberland ended the quarter with $203.7 million in cash and no debt outstanding. Timberland's strong earnings growth and disciplined approach to asset management supported an increase in return on capital from 32.1% to 33.2%.

Timberland's inventory at the end of the first quarter of 2005 was $161.0 million, 12.7% higher than at the end of the 2004 first quarter, or 4.5% on a comparable basis. As previously disclosed, first quarter 2005 reflected the Company's initial period of conversion to new sourcing arrangements with independent suppliers, resulting in an earlier transfer of title for certain third party shipments. The Company estimates that first quarter 2004 inventory and accounts payable balances would have increased by approximately $11.2 million if similar arrangements had been in place last year.

The Company continues to target low to mid single-digit revenue growth and double-digit EPS gains for the full year. It anticipates flat to modest sales and gross profit gains in the second quarter, impacted by an earlier timing of Spring order flow and anticipated pressure on U.S. results, reflecting mix shifts towards more seasonal product. During this period, the Company is planning for high single-digit operating expense growth in support of global business development, including investments against Spring sales initiatives. While these investments will push second quarter earnings below the prior-year level, they reflect the Company's commitment to expanding its global presence and developing the Timberland brand as a year-round resource. For the 2005 second half, the Company is targeting low to mid single-digit revenue growth and double-digit EPS gains.

                        THE TIMBERLAND COMPANY
             (Amounts in thousands, except per share data)

                                                        For the
                                                   Three Months Ended
                                                  April 1,   April 2,
                                                    2005       2004
                                                  ---------  ---------
Revenue                                           $354,211   $321,777
Cost of goods sold                                 167,050    155,326
                                                  ---------  ---------

   Gross profit                                    187,161    166,451
                                                  ---------  ---------

Operating expense
   Selling                                         100,739     95,352
   General and administrative                       24,502     23,341
                                                  ---------  ---------

     Total operating expense                       125,241    118,693
                                                  ---------  ---------

      Operating income                              61,920     47,758
                                                  ---------  ---------

Other income
   Interest income, net                              1,101        234
   Other, net                                          990        293
                                                  ---------  ---------

      Total other income                             2,091        527
                                                  ---------  ---------

   Income before income taxes                       64,011     48,285
                                                  ---------  ---------
Provision for income taxes                          21,764     17,141
                                                  ---------  ---------

      Net income                                   $42,247    $31,144
                                                  =========  =========

Earnings per share
   Basic                                             $1.25      $0.89
                                                  =========  =========
   Diluted                                           $1.22      $0.87