LaCrosse's EPS In Line, Sales Down - Analyst Blog


LaCrosse Footwear Inc ( BOOT ), a leading developer and marketer of premium branded footwear for work and outdoor market, reported earnings of 33 cents per share in the fourth quarter of 2011, in line with the Zacks Consensus Estimate, but significantly below the prior-year quarter earnings of 60 cents per share as the top line continued to struggle.

The footwear company reported net sales of $43.8 million for the quarter, down 15.9% year over year.

For full year 2011, the company reported earnings per share of 45 cents compared with $1.04 in the prior-year period. Total revenue also slipped 12.8% to $131.3 million.

Quarter Highlights

The Portland, Oregon-based company experienced negative sales growth due to lower U.S. military orders and warm and dry weather conditions.

Work Sales plunged 13% from the prior-year quarter to $27.1 million, attributable to lesser military footwear orders from the U.S. government and discontinuation of work apparel products. However, excluding the military contract and work apparel sales, work sales jumped 10%.

Outdoor revenue decreased 20% to $16.7 million, attributed to poor retail business and adverse weather conditions, partially offset by huge demand for hiking boots.

During the quarter, gross margin contracted 160 basis points (bps) to 37.4% primarily due to a rise in close-out sales. Despite investments in product initiatives and marketing activities, operating expense during the quarter declined 10% to $12.7 million.

Financial Aspects

LaCrosse ended the year 2011 with cash and cash equivalents of $0.8 million, long-term debt of $0.2 million and stockholders' equity of $63.1 million. In 2011, the company expended $4.0 million on capital investment and $3.3 million as dividends to shareholders.

Our Take

Though 2011 was not a great year for LaCrosse, it remains optimistic for 2012, as its relationship with major retailers strengthen, wholesale and direct business continues to grow and roll out an innovative product line.  Furthermore, the company intends to invest in marketing activities to enhance its brand awareness and increase its market share.

LaCrosse currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We also maintain our long-term Neutral recommendation on the stock.

One of its prime competitors, Wolverine World Wide Inc. ( WWW ) reported fourth quarter 2011 earnings of 47 cents, handily beating the Zacks Consensus Estimate by a couple of cents, but fell 9.6% from the prior year quarter due to decline in margins.

LACROSSE FOOTWR ( BOOT ): Free Stock Analysis Report
WOLVERINE WORLD ( WWW ): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: BOOT , WWW

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