Timberland reported a net loss of $20.1 million for the second quarter, down from a loss of $23.5 million in the same period a year ago, as sales rose by 27.1 percent to $240.1 million, up 20.6 percent on a constant dollar basis.
The gross margin declined by 2.1 percentage points to 47.4 percent as higher product costs more than offset favorable foreign exchange conditions, but the company expects to benefit from strategic price increases in the second half of this year. The operating loss of $30.9 million for the quarter compared with an operating loss of $33.3 million in the year-ago period.
The company did not hold its usual quarterly conference call with financial analysts because of its impending sale to VF Corp., but its press release indicated that sales have grown strongly in all the major areas of the world.
In Europe, revenues increased by 37.4 percent to $91.7 million, with a rise of 24.6 percent in local currencies and significant growth in the wholesale channel. Sales rose strongly also in the company's own retail stores, on a comparable basis and thanks to new openings.
Sales jumped by 40.0 percent to $42.3 million in Asia, up by 28.1 percent on a constant dollar basis, with double-digit growth in each of the major markets. Here also, the number of stores increased and the existing ones registered strong growth on a same-store basis.
In North America, the company's revenues went up by 15.4 percent to $106.1 million in the period, led by Timberland PRO and other types of Timberland shoes, plus SmartWool accessories.
Global footwear revenues increased by 28.2 percent to $168.7 million, led by strong growth in men's footwear in the wholesale and retail channels. Sales of apparel and accessories moved up by 26.8 percent to $66.0 million, driven by the wholesale channel in Europe and the retail channel in Asia.
Overall, the group's own retail sales increased by 24.5 percent to $89.0 million, with the net addition of 16 new stores. Wholesale revenues went up by 28.7 percent to $151.1 million.