Oakley: second quarter results
Oakley has announced results of its second quarter ended June 30, 2004. Second quarter net sales increased 5.7 percent, to $152.0 million, a second quarter record, compared with $143.8 million in the second quarter of 2003. Net income for the second quarter totaled $16.0 million, or $0.23 per diluted share, compared with $18.2 million, or $0.27 per diluted share, in the second quarter of 2003.
Oakley Chief Operating Officer Link Newcomb commented, "While we are disappointed with the level of overall sunglass sales in the second quarter of 2004, we were encouraged by the strong consumer response to two of our newest sunglass styles, the Dartboard and Why8. Unfortunately, vendor constraints on certain components early in the quarter limited our ability to fulfill all of the orders for these key styles on a timely basis. By the end of the quarter, we believe our production team had resolved these issues and availability of these two styles had greatly improved'.
Second quarter gross sales of newer categories improved by 9.2 percent to a second quarter record $40.1 million, led by strong spring launches of the company's apparel products internationally, together with increased sales of watches and prescription eyewear, partially offset by lower sales of the company's footwear products. Combined sales from the newer categories accounted for 24.0 percent of second quarter gross sales compared with 23.2 percent in the second quarter of last year.
Total second quarter U.S. net sales increased 7.9 percent to $82.9 million from $76.8 million during the same period last year. U.S. net sales, excluding the company's retail store operations, totaled $64.1 million, an increase of 1.5 percent from the comparable quarter of 2003. U.S. net sales to Sunglass Hut increased 12.8 percent to $19.0 million, reflecting a strong seasonal increase. Second quarter net sales at Oakley's retail store locations increased 37.3 percent, to $18.8 million, with the greatest strength being realized in the first two months of the quarter. At the end of the second quarter, the company operated 30 O Store locations, including 2 stores opened during the quarter, and 81 Iacon stores, including 3 stores opened during the quarter. At the end of last year's second quarter, the company operated 20 O Stores and 67 Iacon locations.
Second quarter international net sales increased 3.2 percent, to $69.1 million, compared with $67.0 million in last year's comparable period, including a benefit of 6.5 percentage points from a weaker U.S. dollar. Strong sales increases in Japan, the rest of Asia and South America, and a slight increase in Europe, were partially offset by sales declines in the South Pacific region, Canada and South Africa.
