US: Timberland tumbles in Q1 on higher costs
- Q1 profit down 30.2% to $18.0m
- Gross margin fell 300 basis points to 46.8%
- Revenues up 10.1% to $349.0m
Outdoor clothing and footwear maker The Timberland Company has seen its first quarter profit tumble by 30.2% after higher product costs offset double-digit revenue growth and ate into margins.
But the company said that while it expects input costs to remain high throughout 2011, strategic price increases in the back half of the year are likely to balance this.
Quarterly profit fell 30.2% to $18.0m from $25.7m, and gross margin dropped 300 basis points to 46.8%.
But revenues were up 10.1% to $349.0m thanks to growth across North America (up 8.3%), Europe (up 8.3% on a constant dollar basis), and Asia (up 10% on a constant dollar basis) fuelled by continued expansion in China.
Global footwear revenue increased 10.0% to $248.2m, while sales of apparel and accessories also rose 10.0% to $94.2m. Global wholesale revenue was up 8.6% to $252.0m.
“Earthkeepers and Outdoor Adventure drove healthy growth this quarter, positive proof that we are on the path toward a stronger and healthier brand and business,” said CEO Jeffrey Swartz.
“We are making intentional strategic investments as we seek to deliver another year of top line growth, operating margin expansion, and appropriate earnings per share growth. We are confident we have the right strategy and team in place.”
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