Timberland increased revenues by 10.1 percent to $349.0 million in the first quarter ended April 1, driven by Earthkeepers and Outdoor Adventure products. But the top line was significantly below market expectations, which were for sales of more than $360 million.
The group’s North American revenues increased by 8.3 percent to $132.0 million in the quarter, driven by growth in all brands, channels and genders, including double-digit growth for men’s footwear. European turnover was up by 9.3 percent to $165.7 million, led by wholesale sales of men’s and children’s footwear.
At constant currency rates, European sales were up by 8.3 percent. In Asia, sales rose by 17.8 percent, or 10.0 percent on a currency neutral basis, to $51.3 million, lifted by expansion in China, growth in same-store sales and shop openings in Taiwan and Hong Kong. Apparel and accessories revenues booked double-digit growth at retail level in Asia.
Global footwear turnover was up by 10.0 percent to $248.2 million driven by double-digit growth in men’s and women’s sales in North America and men’s and kids’ sales in Europe. Apparel and accessories revenue increased by 10.0 percent to $94.2 million, supported by growth in all regions.
By channel, wholesale revenue rose by 8.6 percent to $252.0 million, fueled by high-single-digit growth in North America and Europe. Consumer-direct sales were up by 14.0 percent to $97.0 million, growing in all regions. The company ended the quarter with 229 directly operated stores, against 228 at the end of 2010.
Global comparable store sales rose by 8.2 percent, led by domestic stores up by 9.6 percent. The gross margin declined to 46.8 percent from 49.8 percent due to higher costs. Product costs are expected to continue rising throughout 2011 but will be mitigated by prices increases in the second half of the year. Operating income declined by 29.2 percent to $27.9 million a year earlier and net income slipped to $18.0 million from $25.7 million. The company anticipates delivering sales and earnings growth in the full year.