Timberland’s profit grew by 18.5 percent to $30.7 million for the third quarter ended Sept. 26, but the management is concerned about its numbers for the year as customers curb their spending. The company had a 2.2 percent drop in sales for the quarter to $423.6 million. This number was helped by foreign exchange rates, which contributed 2.2 percentage points, and by strong sales of its Timberland PRO and SmartWool brands. The operating margin increased by 2.3 percentage points to 12.6 percent.

By region, European sales grew in dollars by 4.4 percent to $199.9 million with strength in all footwear categories. North American sales, hampered by anticipated declines in apparel and a dip in boot sales, fell by 8.8 percent to $184.5 million; and Asian sales declined slightly by 5.4 percent to $39.2 million on a constant dollar basis.

The boot business was up in Europe and Asia but down in the USA. By product category, apparel and accessory sales were off 11.7 percent to $102.7 million while global footwear sales inched 1.0 percent higher to $313.5 million. PRO footwear and boots offset drops in sales of men’s casual and outdoor performance footwear.

Timberland officials remain concerned about margins into 2009, largely due to high labor costs in Southeast Asia, but management say they are encouraged by the company’s investments in product and marketing. A Timberland flagship store with segment product merchandising will open in the SoHo district of New York later this year. And in Fall 2009, the brand will launch the Mountain Athletics label with its “green element” through retailers worldwide, including Xebio in Japan, Blacks in the U.K. and Dick’s in the USA.

Late last month, Timberland opened a new store in White City at the new Westfield shopping center in London. The store is 239 square meters and its décor is inspired by the 1908 Olympics, particularly the White City Stadium, which was built for the London Games. Almost 90 percent of the materials used in the store are recycled, and the lighting has been sourced from a specialist supplier to conserve energy.