Timberland Q4 Revenue Falls 11.8%

The Timberland Co. reported revenues in the fourth quarter declined 11.8% to $390.6 million. Earnings dropped 24.6% to $13.1 million, or 23 cents a share, from $24.1 million, or 40 cents, a year ago.

The company said the sales decline reflected the net closure of 28 retail stores globally, the transition to a licensing model for the company�s North American apparel business and declines in its global Timberland branded footwear and international apparel businesses, partially offset by continued growth in SmartWool and Timberland PRO. Foreign exchange rate changes decreased fourth quarter 2008 revenue by approximately $14 million, or 3.1%, due to the strengthening of the U.S. dollar.

North America revenue declined 13.4% to $230.6 million, reflecting soft consumer spending in the U.S. Europe revenue decreased 13.8% to $109.6 million but was relatively flat on a constant dollar basis. European results reflect declines in the casual footwear and apparel businesses, partially offset by strong sales of men�s boots. Asia revenue increased 2.3% to $50.4 million, but decreased 7.0% on a constant dollar basis, driven primarily by declines in the apparel business.

The company anticipates that 2009 will continue to be challenging due to uncertainty around consumer spending patterns and the financial health of the retail industry, in general, conditions that make forecasting difficult. Given the volatile nature of current economic conditions, Timberland said it believes there is not sufficient visibility to set expectations for the performance of the business at this time.

For the full-year 2008, Timberland reported net income of $42.9 million, or 73 cents a share, compared to the full-year 2007 net income of $40.0 million, or 7 cents, a year ago. These results compare to last year's diluted EPS of 65 cents, or 92 cents when adjusted to exclude restructuring and related costs. Revenues declined to $1.36 billion from $1.44 billion.

Jeffrey B. Swartz, Timberland's president and CEO, stated, “To say that the fourth quarter of 2008 was challenging would grossly understate the conditions that global consumer product companies were and are facing. And yet at Timberland, I feel like the current market conditions offer us opportunity. We have strategies in place to reinvigorate our brand and strengthen our position in the global market and a strong balance sheet with $217 million in cash and no debt. The strength of our balance sheet gives us the financial capability to continue to invest behind our strategies and positions us to capitalize on the opportunities that will develop for powerful brands as consumer markets begin to stabilize and improve.”