The Stride Rite Corporation (NYSE:SRR) today reported financial results for the first quarter of its 2003 fiscal year.
Net sales for the first quarter of fiscal 2003 were $152.3 million, an 8% increase from the $140.7 million in the comparable period of fiscal 2002. Net income for the first quarter of fiscal 2003 totaled $8.8 million, up 17% from the $7.5 million amount earned in the first quarter of 2002. Earnings per share improved $.04 during the first quarter, to $.22 per diluted share in 2003 from $.18 per diluted share in the first quarter of fiscal 2002.
Sales of the Keds brand in the first quarter of 2003 increased 7% as compared to the same period last year. Sales of the Stride Rite Children's Group increased 2% for the first quarter of fiscal 2003 versus the same period last year. Compared to last year's first quarter, sales at Stride Rite Children's company-owned stores were flat while sales to independent retailers increased 4%. The Stride Rite Children's Group operated 230 stores at the end of the first quarter of 2003, down 5% from the store count at the end of the first quarter of fiscal 2002. The 2002 store count included the 46 Federated leased department stores, which the Company exited at the end of April 2002. Sales at comparable company-owned stores in the first quarter of 2003 decreased 6.2% versus the same period last year. Sales of Tommy Hilfiger footwear in the first quarter of 2003 increased 37% compared to the first quarter of the prior year. Sales of Sperry Top-Sider products increased 15% during the first quarter of fiscal 2003 versus 2002. First quarter 2003 International sales declined 23% compared to the same period last year.
During the first quarter of fiscal 2003, the Company's gross profit percentage of 38.1% improved 130 basis points as compared to last year. At the end of the first quarter of fiscal 2003, the balance sheet remains strong with inventory levels 5% below last year. The accounts receivable balance increased just 3% compared to last year, on a sales increase of 8% and DSO was reduced 3% versus last year to 57 days. The Company's cash position at quarter end increased 13% versus a year ago to $32 million with no outstanding debt.
David M. Chamberlain, Stride Rite's Chairman and Chief Executive Officer, commented, ''Overall, I am pleased with our first quarter financial results. The positive momentum from last year in both our Tommy Hilfiger footwear and Sperry Top-Sider brands carried into 2003 with double-digit sales increases. The Tommy Hilfiger footwear brand continued to successfully expand its retail distribution and product offerings to independent and family chain shoe stores. Our Sperry Top-Sider brand enjoyed shipment increases in performance boat shoes and women's product offerings. The Keds brand, which has been repositioned, had a solid start with its initial Spring product shipments, which focused on new, fun and colorful styles.
The Stride Rite Children's Group sales results were mixed. Our children's wholesale and retail businesses felt the effects of the economic slow down, weather, and the calendar change to a later Easter this year. Tommy Hilfiger children's products, which are now being developed and sold through our Children's Group, were a bright spot. Our International business had a difficult quarter, due in part to specific economic issues in certain countries.
Mr. Chamberlain concluded, ''We entered the Spring selling season feeling good about our product lines. This was reflected in our solid first quarter results. Success in the second quarter will in large part be determined by the consumer take away and the reorders that generates for us. With the unsettled world situation and soft economy, it is difficult to forecast annual earnings. At this point, our guidance for annual earnings is a range of $.60 – $.64 per share, subject to the foregoing.''