LaCrosse Footwear Inc (BOOT), a leading developer and marketer of premium, branded footwear for work and outdoor market, reported fourth quarter 2010 earnings of 60 cents, ahead of the Zacks Consensus Estimate of 55 cents and 36 cents reported in the prior-year quarter.
Portland, Oregon-based LaCrosse reported that net sales in the fourth quarter climbed 23% year over year to $52.1 million.
The better-than-expected results were driven by double-digit growth in the top line and margin expansion.
The company’s full-year earnings per share were $1.04 versus 86 cents in full fiscal 2009. Revenues were $150.5 million in full fiscal 2010, representing a year-over-year growth of 8.0%.
Inside the Headline Numbers
In the fourth quarter and fiscal 2010, the footwear company experienced strong sales growth in both work and outdoor markets.
Work Sales leaped 24% from the prior-year quarter to $31.2 million, driven by strong demand for specialized work footwear categories and sales growth across various areas of the U.S. government. In 2010, the segment revenue spiked 7% to $94.7 million.
Outdoor revenue increased 21% to $20.9 million, attributed to huge demand for hunting and rugged categories. In 2010, the segment revenue jumped 9% to $55.8 million.
During the quarter, gross margin expanded 90 basis points (bps) to 39.3% due to the drop in the volume of close-out sales. In 2010, gross margin increased 40 bps from the prior-year period.
Financial Aspects
LaCrosse ended the year with cash and cash equivalents of $4.3 million, long-term debt of $0.3 million and stockholder equity of $64.4 million.
Our Take
The company reported better-than-expected results attributed to an improvement in the economic conditions and huge success of the Pronghorn hunting boot. We believe that the company’s profit will increase in 2011 as LaCrosse continues to focus on introducing innovative products and strengthening its relationship with its retailers. Moreover, the company continues to invest in marketing activities to enhance its brand awareness and increase its market share.
LaCrosse currently retains a Zacks #1 Rank, which translates into a short-term Strong Buy rating. We also maintain our long-term Outperform recommendation on the stock.
One of its prime competitors, Deckers Outdoor Corporation ( “>DECK ), will report its fourth quarter results on 23 February, 2011.
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