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Today's news...8/9/05
AUGUST 09, 2005 --
Falling Military Tent Sales Hurt Johnson's 3Q Results
Johnson Outdoors 3Q net sales were $122.4 million, the highest reported since '99, and 1.1% above the comparable '04 period. Humminbird, acquired in May '04, reported three months' sales in 3Q05 compared to two months in the prior year's quarter. As a result, Humminbird sales are up $6.6 million over the previous 3Q, and are reflected in total Marine Electronics' results (+10.8%). Watercraft posted a strong gain in revenue (+7.8%) resulting in its highest sales quarter in two years. Diving sales benefited from favorable currency translation ($500,000), and double-digit growth in North American markets. Europe needs improvement, however.
As announced on May 27, the company was awarded a new $15.9 million urgent need order for military tents. However, 3Q revenues in Outdoor Equipment do not reflect delivery against this order. Sales of this unit fell 23.8% in 3Q. The company continues to expect military sales to decline up to 25% in '05 versus '04, as sales in this segment declined 32.5% versus the prior year quarter, and accounted for the majority of the revenue decline in Outdoor Equipment.
The company's 3Q net profit fell 9.3% to $6.8 million.
Magic Johnson Is Offering A Signature Line Again
Magic32 started up this year. After a long history with Converse, Johnson was associated with his own brand after his retirement. He's trying again to capitalize on his basketball fame. Magic32 shoes will retail under $60, and some NBA players will play in them in '05-'06. This is more than 350,000 pairs of shoes. '05 expectations have already been exceeded (total sales will end up $9-$10 million). '06 projections are now set for $15-$18 million.
Net 1H sales of Fortune Brands' golf businesses increased $39.0 million, or 5%, to $785.8 million. The increase was attributable to higher sales of golf balls (price increases, a shift to the Titleist brand and volume growth through continued share gains), golf club sales growth mainly due to new product introductions, volume growth in golf shoes and favorable foreign exchange ($11 million). Operating income increased $24.6 million, or 20%, to $149.3 million on higher sales, a shift toward higher margin Titleist branded golf balls and clubs, margin improvement in FootJoy golf shoes, favorable foreign exchange and the absence of restructuring-related charges ($5 million).
Kingwhale and TrapTek, LLC have entered into a license agreement that grants knitter Kingwhale the rights to utilize TrapTek's new technology throughout the Spring/Summer line. Kingwhale will debut a new collection of knits that demonstrate the evaporative cooling system powered by TrapTek. The technology permanently embeds activated carbon, derived from coconut shells, into fiber and yarns to provide cool natural comfort. These knits disperse moisture across an enormous surface area created by the activated carbon particles. A technical T-shirt made of TrapTek activated carbon has the surface area of a soccer field, initiating an evaporative cooling effect.
Analysts at Jyske Bank downgraded Adidas-Salomon from buy to accumulate. The target price has been raised from EUR 160 to EUR 177. Analysts mentioned that the downgrade follows the recent appreciation in the company's share price. The acquisition of Reebok for EUR 3.1 billion would significantly strengthen Adidas-Salomon's position in the US market, Jyske Bank said. The sale of Salomon is warranted, given the division's increasing losses, the analysts said.
Wachovia and Piper Jaffray have initiated coverage of Volcom with a market perform rating. Both were underwriters of the recent IPO.
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Categories
Basketball
Sporting goods industry
Golf
Companies
3Q Inc.
Johnson Outdoors Inc.
Titleist
Jyske Bank AS
Salomon
Concepts
evaporative cooling
surface area
favorable foreign exchange
activated carbon
golf balls
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