The Timberland Company (NYSE: TBL) today reported results for the quarter ended June 27, 2003. For the second quarter of 2003, Timberland reported revenue of $211.7 million, 10.5% higher than the $191.5 million reported for the second quarter of 2002. Constant dollar revenue growth, which excludes the impact of changes in foreign exchange rates, grew 5.3%. Solid revenue growth, improvement in gross margins and continued benefits from share repurchases contributed to strong profit and earnings per share (EPS) gains. EPS for the quarter was $0.16 per share diluted ($0.16 basic), 23.1% above second quarter 2002 EPS of $0.13 per share diluted ($0.13 basic).
Revenue growth in the second quarter of 2003 was driven by double-digit sales gains in international markets and moderate growth in the United States. Domestic revenue for the second quarter of 2003 was $129.2 million, 2.6% higher than the $125.9 million reported for the second quarter of 2002. International revenue for the quarter increased 25.8% to $82.6 million, compared with $65.7 million for the prior-year period. On a constant dollar basis, international revenue increased 10.4%. International revenue comprised 39.0% of total second quarter 2003 revenue, compared with 34.3% for the second quarter of 2002.
Worldwide footwear revenue for the second quarter of 2003 was $162.5 million, 11.8% higher than the $145.4 million reported for the second quarter of 2002. Worldwide apparel and accessories revenue for the quarter increased 7.7% to $46.7 million, compared with $43.3 million for the 2002 second quarter. Worldwide royalty revenue for the second quarter decreased 9.4% to $2.5 million, compared with $2.8 million for the comparable prior-year period.
Worldwide wholesale revenue for the second quarter of 2003 was $149.4 million, 10.7% higher than the $134.9 million reported for the second quarter of 2002. Worldwide consumer direct revenue, which includes Timberland's worldwide retail and U.S. e-commerce businesses, increased 10.2% to $62.4 million for the quarter, compared to the $56.6 million reported for the second quarter of 2002. U.S. wholesale revenue for the 2003 second quarter increased 3.3% to $96.3 million, compared with the $93.3 million reported for the second quarter of 2002. U.S. consumer direct revenue for the 2003 second quarter increased 0.8% to $32.9 million, compared with $32.6 million for the 2002 second quarter. Domestic comparable store sales for the quarter decreased by 1.9%.
Timberland's net income was $5.8 million for the second quarter of 2003, compared with net income of $4.9 million for the prior-year period. Timberland's second quarter ending cash balance increased to $82.6 million from $72.3 million in the second quarter of 2002, after financing operating requirements and share repurchases. The company repurchased 486 thousand shares in the second quarter at a cost of $24.7 million and 2.9 million shares over the past twelve months at a cost of $113.1 million. Timberland has 1.7 million shares remaining under its current four million share repurchase authorization. The Company may use Rule 10b5-1 plans to facilitate share repurchases.
Jeffrey B. Swartz, Timberland's President and Chief Executive Officer, stated, #'Timberland delivered strong results in the second quarter reflecting continued progress against our strategic objectives. Our financial results reflect gains across global markets and reinforce that we are on track toward delivering solid revenue and earnings gains in 2003. As we celebrate the 30th anniversary of the Timberland(R) brand, we intend to build on this momentum by driving a continued focus on product innovation, by amplifying our brand message to reinforce the values that will deepen our relationship with consumers and by delivering superior service to our retail partners.''
#'Looking forward, we continue to believe that mid single-digit revenue growth represents an appropriate target for the second half of 2003, given macroeconomic conditions and comparisons to prior year results. We also remain committed to delivering moderate improvements in operating margins this year while investing to support our long-term goals for developing the Timberland brand.''
Note that comments made by Mr. Swartz are Timberland's performance targets, based on current expectations. These comments are forward-looking, and actual results may differ materially.