It looks like those who are waiting for Timberland (NYSE:TBL) to turn things around are going to have to wait a good deal longer.

If you shivered at last year's third-quarter results, you better grab a jacket before diving into the company's earnings release from Thursday.  Timberland's net income fell 53% to $25.9 million, or $0.42 per share. Revenue fell 13.9% to $433.3 million. And when it comes to its outlook, Timberland didn't have good news to share, either.

The company said fourth-quarter revenue will decline in the mid-single digits and operating margin will decrease by 200 basis points. And in 2008, Timberland sees revenue in the first half of the year declining by mid-single digits, although it expects to improve operating results as it continues to restructure its business.

Timberland plans to close about 50 U.S. stores that have been underperforming and focus on a new retail plan, which is to peddle its footwear in smaller store formats. On the bright side, Timberland's still on target to continue its expansion in Asian markets, with 50 wholesale channels opening in China this year.

Unfortunately, although the company has often spoken optimistically about its plans, there's not much to show for them yet. Things started going downhill in May 2006, and while last winter's warm weather excuse for lackluster boot sales made sense, the situation is getting a bit long in the tooth.

Meanwhile, one analyst in the company's conference call said Nike (NYSE:NKE) has boasted of stealing market share from Timberland for two years running, and that it plans to do so again in 2008. That's a pretty ominous thought. And overall, footwear and fashion can be fickle indeed -- look at Skechers (NYSE:SKX), Crocs (NASDAQ:CROX), and Heelys (NASDAQ:HLYS), all of which were highfliers that have taken a hit recently on signs of slowing growth and competitive difficulties. 

I've had my eye on Timberland this year, and several months ago I thought it looked like a reasonable bargain. Among the factors that make it look particularly alluring are its socially responsible and environmental stances,  as well as its history of generating impressive free cash flow.

However, recent developments -- including the decision to ratchet down retail stores -- seem to show that Timberland's tough times are a little more serious than it previously appeared. With so little sign of progress, I can see why many investors may think it's best to stay away from Timberland.

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Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.