DISAPPOINTING QUARTER FOR TIMBERLAND
Timberland says it will streamline its operations in the wake of a disappointing third quarter. The company reported a 53 percent drop in net income for the quarter ended Sept. 29, down to $25,865,000. The operating margin slid by 4.8 percentage points to about 12 percent. Total sales fell by 14 percent to $433.3 million, and gross margins decreased by 0.8 percentage points to 46.9 percent. Sales declined by 8 percent in Europe and by 23 percent in the USA, but they climbed 8 percent in Asia, where Timberland plans to open 50 franchised stores by the end of the year.
Management said that children’s and boots operations will be down $100 million for the current financial year. It expects a drop in operating margins of 2 percentage points and a small decline in revenues for the fourth quarter. Operating margins for the year are expected to be down by 4 to 5 percentage points. However, Timberland is more optimistic about the first half of 2008, projecting $10 million in annualized savings; $6 million of this would come from closing 50 of its stores by the end of the first quarter.
The company has named Gene McCarthy and Mike Harrison as co-presidents. They will manage Timberland’s youth, casual and outdoor segments.
