L.L. Bean posts record profits for first 6 months of fiscal year

FREEPORT – L.L. Bean is reporting that it earned record profits for the first six months of its fiscal year through August.

The outfitter said sales from March, when its fiscal year begins, through August were up just 2 percent from the same period last year.

But cost-cutting initiatives, more sales at full price and a lower rate of product returns resulted in record profits, said Chris McCormick, president and chief executive officer. The company, which is privately held, does not make public exact numbers.

McCormick said the company is sending $100 checks, after taxes, to all of its employees. The positive financial report, along with midyear bonuses, is a welcome change from the flat revenues, canceled bonuses and layoffs that have plagued Bean in recent years.

“Morale here hasn’t been this good in many years,” McCormick said. “You think, ‘Wow, a lot of things are going well for us.’ It’s a great feeling to have this, going into the busy time of year.”

McCormick said the company’s outlook wasn’t so rosy at the start of the year, when sales were held back by the uncertainty of war with Iraq. But the company has been helped by the Bush administration’s tax cuts and rebounding consumer confidence, he said.

With upbeat forecasts for the economy, McCormick is also confident about the next six months.

Meanwhile, L.L. Bean is sitting tight about a possible purchase of rival outfitter Eddie Bauer, whose corporate parent, Spiegel Inc., is going through bankruptcy. McCormick said any acquisition could end up being a two-year process.

“Spiegel knows that we’re interested in Bauer and they’ve asked us to lay low for a while, so that’s what we’re doing,” McCormick said. “It’s worth looking into still. If nothing else, getting market intelligence on a competitor is a positive thing.”