• Q3 profit jumps 23% to $37.8m
  • Revenue flat at $421.8m
  • North American sales up 2.0% to $188.2m

Strong sales in North America and in its footwear business, coupled with aggressive cost cutting, have helped The Timberland Company to a surprise 23% jump in third quarter profit - but the firm says it still has a lot of work ahead before the brand "has reached its full potential."

"I am optimistic about what I am seeing this fall, said president and chief executive officer Jeffrey B Swartz.

"Our product is better than ever, our marketing is loud and distinct and our team is focused and energised by the progress we have made against our strategic initiatives."

The firm said today (29 October) that net income in the quarter was up to $37.8m or $0.68 per share, compared with $30.7m or $0.52 per share in the same period last year.

Revenue remained flat at $421.8m, but was up 1.7% on a constant dollar basis, reflecting strong growth in the European boots business and SmartWool brand offset by declines in casual footwear and Timberland brand apparel.

The strength of the US dollar against the British pound and the euro knocked around $9m off third-quarter revenues, the company said.

Strong growth in the kids' boot business and in the SmartWool brand helped lift North American sales by 2.0% to $188.2m.

But in Europe, strong growth in the boots business was unable to offset declines in the casual and apparel businesses, leading to a 2.3% drop in revenues to $195.2m.

And in Asia, revenue fell 2.3% to $38.3m, driven by declines in casual footwear and apparel.

Strong boot sales helped lift global footwear revenue by 1.8% to $319.1m, while apparel and accessories sales were down 6.7% to $95.8m.

Global wholesale revenue was relatively flat at $342.2m, but worldwide consumer direct revenue dropped 4.2% to $79.5m, partly due to weakness in the North America outlet stores.

The company, whose brands include Timberland, SmartWool, Howies and Mountain Athletics, said it managed to cut inventory levels by 7.8% to $201.7m at the end of the quarter.

Click here to read further analysis of Timberland's Q3 results.