Stride Rite's Earnings Top Last Year
LEXINGTON, Mass.--(BUSINESS WIRE)--March 27, 2001--The Stride Rite Corporation (NYSE:SRR) today reported higher earnings for the first quarter of its 2001 fiscal year.
Net sales for the first quarter of fiscal 2001 decreased slightly to $151.1 million from $151.7 million in the comparable period of fiscal 2000. Net income for the first quarter of fiscal 2001 totaled $7.8 million, a 4% increase from the $7.5 million amount earned in the first quarter of 2000. Aided by the Company's continuing share repurchase program, earnings per share grew at a faster rate during the first quarter, increasing 12% to $.19 per diluted share in 2001 from $.17 per diluted share in the first quarter of fiscal 2000.
The Company's performance in the first quarter of fiscal 2001 was driven by the growth of the Stride Rite children's business. Sales of the Stride Rite Children's Group increased 11% in the first quarter of 2001, with sales at company-owned retail stores up 13% and sales to independent accounts up 9% from the comparable period in fiscal 2000. A large portion of the retail sales increase in the first quarter was due to store openings and a more productive store mix, but sales at comparable company-owned stores also increased, showing a 0.9% gain over last year. The Stride Rite Children's Group operated 202 stores at the end of the quarter, up 7% from the store count in 2000. Sales of the Tommy Hilfiger footwear business in the first quarter of 2001 were even with last year. Sales of the Keds brand in the first quarter of 2001 were 3% below last year as increased revenues from the introduction of the improved Keds Champion(R) style were not sufficient to offset the lower sales of other product lines. Sales of Sperry products decreased 21% during the first quarter of fiscal 2001 as boat shoe reorder demand fell below expectations.
David M. Chamberlain, Stride Rite's Chairman and Chief Executive Officer, commented, "Our Stride Rite children's business posted its strongest quarterly sales gain in several years. The first quarter results benefited from the introduction of our new Munchkin(R) product line for the moderate retail channel and continuing product innovation in the Stride Rite line. The Stride Rite children's business has nice momentum going into the balance of the year and we look for continued sales growth in our own stores and with our independent retailers. The next few months will be an important period for all of our brands, with reorder levels determining the success of our wholesale businesses. This is especially true for the Keds and Sperry brands, as we enter the retail selling period for the Spring season. We began our Keds television advertising campaign in late February to support the introduction of the more comfortable Keds Champion(R) product line, which is our key program for this season. We have also received a favorable reaction from retailers to the new Keds Ready to Wash(TM) and PureFit(TM) product lines, with initial deliveries of these products scheduled for late May. As the Spring weather arrives, Sperry's focus on boating footwear and increased promotional activity with major retailers should bring us back to more historical sales levels in the upcoming quarter. We were pleased with the flat sales performance of Tommy Hilfiger footwear in the first quarter of fiscal 2001, given our trends of the past twelve months."
Mr. Chamberlain continued, "Our goals for fiscal 2001, revenue growth of 3% to 5% and profit improvement of 8% to 12%, remain unchanged. Our success will be dependent, in large measure, on the sell-through performance and reorder levels of our new Keds programs and the continuing progress of our Stride Rite children's business."
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.
(in thousands) March 2, March 3, 2001 2000 ------- -------- Net sales $151,093 $151,663 Net income 7,818 7,487 Net income per share of common stock: Diluted $ .19 $ .17 Basic $ .19 $ .17 Shares used in per share computations: Diluted 41,946 44,103 Basic 41,649 43,980
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, Grasshoppers, Munchkin and Street Hot. Information about the Company is available on our website - www.strideritecorp.com. The Company will provide a live webcast of its first quarter conference call. The live broadcast of Stride Rite's quarterly conference call will be available on the Company's website and at www.streetevents.com, beginning at 10:00AM EST on March 27, 2001 An on-line replay will follow shortly after the call and will continue through April 3, 2001. 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; the opening of new stores may be delayed; new retail concepts may not achieve expected results; general retail sales trends may be below expected growth rates; current license agreements may be terminated; consumer fashion trends may shift to footwear styling not currently included in the Company's product lines; the Company's retail customers, including large department stores, may consolidate or restructure operations resulting in unexpected store closings; 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.
The Stride Rite Corporation Summarized Financial Information for the periods ended March 2, 2001 and March 3, 2000 Statements of Income (in thousands) First Quarter ------------- 2001 2000 ---- ---- Net sales $151,093 $151,663 Cost of sales 96,169 96,766 -------- -------- Gross profit 54,924 54,897 Selling and administrative expenses 43,207 43,264 -------- -------- Operating income 11,717 11,633 Other income (expense), net 503 429 -------- -------- Income before income taxes 12,220 12,062 Provision for income taxes 4,402 4,575 -------- -------- -------- -------- Net income $ 7,818 $ 7,487 Balance Sheets Assets: 2001 2000 ---- ---- Cash and cash equivalents $ 3,471 $ 3,850 Accounts receivable 115,923 105,374 Inventories 91,940 106,521 Deferred income taxes 25,494 26,303 Other current assets 4,451 4,645 -------- -------- Total current assets 241,279 246,693 Property and equipment, net 75,882 69,594 Non-current fixed income investments 11,746 9,849 Other assets 10,036 11,285 -------- -------- Total assets $338,943 $337,421 ======== ======== Liabilities and Stockholders' Equity: Short-term debt 10,000 6,000 Other current liabilities 67,138 78,052 -------- -------- Total current liabilities 77,138 84,052 Deferred income taxes 5,929 5,219 Stockholders' equity 255,876 248,150 -------- -------- Total liabilities and stockholders' equity $338,943 $337,421
CONTACT: The Stride Rite Corporation John M. Kelliher, Chief Financial Officer (617) 824-6028