Talk about a conference call where I was glad I was not the presenter. Even if shareholders were expecting it, how does one kindly break the news that adjusted EPS for the quarter dropped off the table to the tune of 46%? That was the task at hand yesterday for Timberland (NYSE:TBL) CEO Jeffrey Swartz and acting CFO John Crimmins. In light of the circumstances, the tandem did about as well as one could expect.

Though one would think the weather wouldn't have an effect on the outdoorsman, unseasonably cold weather during Q1 was noted as a contributing factor to keeping consumers inside and placing pressure on the company's product margins in the U.S. and in Europe. Timberland's operating profit excluding restructuring costs was flat when compared to its FY 2006 Q1. This trend is in stark contrast to competitors Wolverine World Wide (NYSE:WWW) and Nike (NYSE:NKE), which recorded double-digit earnings growth for their most recently reported fiscal quarters.

For Timberland, Q1 revenue slipped 3.9% as the company experienced declines in sales of boots and kids' footwear. The company's wholesale business also performed rather poorly during the quarter with global wholesale revenue dropping 7.3% versus the year-ago quarter.

On the positive side, the company announced double-digit sales growth from its SmartWool and Timberland PRO product lines. Direct sales were strong during the quarter and the company is expecting continued growth in its business in Asia. The company also repurchased $10 million worth of common shares during the quarter and ended its Q1 with no debt on the books.

Going forward, however, analysts' and the general market's expectations are not particularly high for the stock, as it now trades at a 22% discount to its 52-week high achieved in mid-November. With the expectation of flat revenues and continued pressure on margins, the company is of the opinion that operating profits will decline in Q2 versus its prior-year quarter.

But in an attempt to right its ship over the long haul, during Q1, the company announced a five-year licensing agreement with Phillips-Van Heusen (NYSE:PVH) for the marketing of apparel in North America under the Timberland brand beginning with the Fall 2008 line. This move, along with other strategic initiatives that Timberland has outlined, could restore earnings growth over time. Nevertheless, I think I am going to remain on the sidelines on this stock for the time being. 

For more on Timberland and it's cohorts in shoebiz, check out:

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Fool contributor Billy Fisher does not own shares of any of the companies mentioned. The Motley Fool has a disclosure policy.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.