Stride Rite's Earnings Climb 31%
LEXINGTON, Mass.--(BUSINESS WIRE)--March 28, 2000--The Stride Rite Corporation (NYSE:SRR) today reported higher sales and earnings for the first quarter of its 2000 fiscal year.
Net sales for the first quarter of fiscal 2000 increased 2% to $151.7 million from $148.2 million in the comparable period of fiscal 1999. Net income for the first quarter of fiscal 2000 totaled $7.5 million, a 22% increase from the $6.1 million amount earned in the first quarter of 1999. Aided by the Company's continuing share repurchase program, earnings per share grew at a faster rate during the first quarter, increasing 31% to $.17 per diluted share in 2000 from $.13 per diluted share in the 1999 first quarter.
All of the Company's brands posted sales increases during the first quarter of 2000. The positive comparisons were led by the Keds brand, which delivered a 7% sales increase for the first quarter, as the comfort of Keds Stretch(TM) products continued to win over customers. The Sperry brand added another quarter to its favorable sales trends by posting a 6% increase in the first quarter of fiscal 2000 over the comparable period in 1999. Sales of Tommy Hilfiger footwear in the first quarter of 2000 increased 4% from the comparable period of last year, a difficult comparison as 1999's first quarter included the launch of the Spring line for Tommy Hilfiger women's. Sales of the Stride Rite Children's Group increased 1% during the first quarter of 2000, with a 3% increase in sales at company-owned retail stores offsetting a slight decline in the sales of Stride Rite products to independent retailers. Sales of comparable, company-owned retail stores increased 1.5% during the first quarter of fiscal 2000. The stores were up against an 8.4% sales gain in last year's first quarter, the strongest quarterly performance of the 1999 fiscal year.
David M. Chamberlain, Stride Rite's Chairman and CEO, commented, "We are off to a solid start in fiscal 2000. The Keds brand delivered a good performance in the first quarter, slightly exceeding our expectations as we continue to transition the Keds product line with updated styling. In our children's business, the mid-February introduction of 'Stride Rite Baby', our new product line based on the Natural Motion System(TM), helped our retail stores deliver a significant sales increase in the final weeks of the first quarter. Our balance sheet at the end of the first quarter continues to be in excellent shape, with accounts receivable and inventory levels both below last year, down 3% and 15%, respectively. During the first quarter of 2000, we continued our share repurchase program by buying back 1.3 million common shares at a cost of $7.8 million."
A summary of sales and net income for the first quarter is provided below. A more detailed balance sheet and income statement follows this release. -0-
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(in thousands)
March 3, February 26,
2000 1999
Net sales $151,663 $148,184
Net income 7,487 6,149
Net income per share of common stock:
Diluted $ .17 $ .13
Basic $ .17 $ .13
Shares used in per share computations:
Diluted 44,103 46,530
Basic 43,980 46,394
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The Stride Rite Corporation markets the leading brand of high quality children's shoes in the United States. Other footwear products for children and adults are marketed by the Company under well-known brand names, including Keds, Sperry, Tommy Hilfiger, Nine West Kids, Grasshoppers and Street Hot. Information about the Company, including a replay of the first quarter conference call with management, is available on our website - www.strideritecorp.com. Information about the Company's brands and product lines is available at www.striderite.com, www.keds.com and www.sperrytopsider.com.
This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. The words "expect", "estimate", and other similar expressions which do not relate solely to historical matters identify forward-looking statements. Undue reliance should not be placed on forward-looking statements because they involve known and unknown risks and uncertainties which may cause actual results to differ materially from anticipated, projected or implied future results. Factors that may cause such a difference include, among others: revenues from new product lines may fall below expectations; the launch of new product lines may be delayed; and additional factors discussed in the Company's reports filed with the Securities and Exchange Commission and the exhibits thereto. The Company disclaims any responsibility to update these statements.
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The Stride Rite Corporation
Summarized Financial Information
for the periods ended March 3, 2000 and February 26, 1999
Statements of Income
(in thousands)
First Quarter
2000 1999
Net sales $ 151,663 $ 148,184
Cost of sales 96,766 93,677
Gross profit 54,897 54,507
Selling and
administrative expenses 43,264 44,540
Operating income 11,633 9,967
Other income (expense), net 429 (54)
Income before income taxes 12,062 9,913
Provision for income taxes 4,575 3,764
Net income $ 7,487 $ 6,149
Balance Sheets
Assets: 2000 1999
Cash and short-term investments $ 3,850 $ 2,327
Accounts receivable 105,374 108,485
Inventories 106,521 125,610
Deferred income taxes 26,303 24,758
Other current assets 4,645 4,478
Total current assets 246,693 265,658
Property and equipment, net 69,594 59,433
Non-current fixed income investments 9,849 10,156
Other assets 11,285 14,037
Total assets $337,421 $349,284
Liabilities and Stockholders' Equity:
Short term debt 6,000 13,700
Other current liabilities 78,052 80,715
Total current liabilities 84,052 94,415
Deferred income taxes 5,219 6,042
Stockholders' equity 248,150 248,827
Total liabilities and stockholders' equity $337,421 $349,284
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CONTACT: The Stride Rite Corporation
John M. Kelliher
(617) 824-6028