Earnings Preview: Steven Madden, Adidas, Timberland, Crocs

Steven Madden Ltd.
At $42.62 Friday, Madden’s shares were near its 52-week high of $44.85.  

That may not be surprising, considering the company showed its strength this quarter by, among other things, acquiring the Betsey Johnson brand for $27.4 million.

Analysts are expecting the Long Island City, N.Y.-based firm to earn 77 cents on revenue of $170.4 million, as polled by Yahoo Finance.

And although rising sourcing costs are affecting many companies industrywide, investment bank Sterne Agee said Madden is among those most insulated by those pressures, because “pricing power is likely to depend upon brand equity, fashion quotient, differentiation of product, freshness of product and price point” — all strong points for Madden, it wrote in a research note.

Madden earned $19.8 million, or 70 cents a share, in the second quarter, while net sales for the period increased 36 percent to $158.7 million.

Adidas AG
Pent-up demand for high-end athletic shoes could mean good things for Adidas.

Paul Swinand, analyst at Morningstar Inc., said he’s been “hearing good things from retailers about Reebok” this quarter.

“I’m expecting a reasonably good all-round quarter. If sales were negative, I’d be very surprised,” said Swinand.

Susquehanna Financial Group analyst Christopher Svezia wrote in a research note that top-line momentum continues, albeit at a slower pace than in the first half, as the one-time sales boost from the World Cup dissipates.

“However, second-half sales should benefit from World Cup reorders, continued momentum for Reebok (toning and ZigTech), a return to growth in China and currency exchange tailwinds,” he added.

Shares of the Herzogenaurach, Germany-based firm have risen 15 percent in the last three months.

For the second quarter, the firm earned a net income of 126 million euros, or $165.6 million at current exchange, from 9 million euros, or $11.8 million, in the same period a year ago. Net sales for the period were 2.9 billion euros, or $4 billion.

Consensus for third-quarter EPS was 1.18 euros, or $1.64 as of Friday afternoon.

Timberland Co.
Timberland widened its loss by 2 percent in the second quarter, but analysts are looking for improvements in top-line growth and second-half margin opportunities.

“We believe the company’s brand positioning continues to gain traction moving into spring ’11 and expect to see an inflection point in the core boot business by year-end,” Susquehanna’s Svezia wrote in a research note.

“[But] a full turnaround could be a long road ahead,” he added.

Shares of the Stratham, N.H.-based firm have increased 17 percent in the last three months, and the consensus of six analysts polled by Yahoo Finance is third-quarter EPS of 77 cents on revenue of $441 million.

Timberland lost $19.2 million, or 34 cents a share, in the second quarter. Sales fell 14 percent to $179.7 million.

Crocs Inc.
After losing 13 cents in the fourth quarter last year, Crocs has made strides to return to profitability this year, earning 7 cents in the first quarter and 37 cents in the second.

Shares of the Niwot, Colo.-based firm have also rebounded from a low of $4.33 last November to $13.94 now.

Analysts are now looking for earnings of 24 cents on revenue of $205.8 million, as polled by Yahoo Finance.

An aggressively expanded range of styles — including sandals, flip-flops and rainboots — could help drive sales, as well as comp-store improvement, said analysts.

Top-line growth at the firm in the second quarter was 15 percent. Net income was $32.3 million, or 37 cents a share, a reversal from a loss of $30.3 million, or 36 cents, in the same period a year ago.

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