Oakley: third quarter results

Oakley yesterday announced results of its third quarter ended September 30, 2004.

Third quarter net sales increased 2.2 percent to $148.2 million, a third quarter record, compared with $145.0 million in the third quarter of 2003. Net income for the third quarter totaled $11.4 million, or $0.17 per diluted share, compared with $13.5 million, or $0.20 per diluted share, in the third quarter of 2003.

Oakley Chief Operating Officer Link Newcomb commented: 'Oakley's third quarter results reflect continued progress on our product diversification and retail initiatives. Newer category sales increased 7.1 percent and grew to represent 35.2 percent of third quarter gross sales. Sales through Oakley-owned retail stores contributed 12.7 percent of third quarter net sales as modest positive comparable store sales and successful new store openings combined to generate growth of 25.6 percent'.

'In contrast, the third quarter proved challenging for our core sunglass business which experienced a 10.7 percent decline in sunglass unit volumes. A weak retail environment in Europe and the South Pacific region and a wet summer in Europe, coupled with increased competitive pressure from competing fashion brands in some markets, contributed to a substantial decline in sunglass sales'.

Newcomb concluded, 'Even though we expect continued near-term challenges within our core sunglass business, we believe we are poised for a strong fourth quarter, thanks to the upcoming launch of Oakley Thump, the company's innovative integrated digital audio eyewear, through a select group of leading retail partners in the U.S. and key international markets. We expect substantial earnings growth in the fourth quarter and are reiterating our full year 2004 net sales guidance of $575 to $585 million and earnings guidance of $0.60 to $0.65 per diluted share, now expecting to achieve the lower end of both of those ranges'.