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NEW YORK — Helped by a 48 percent rise in U.S. apparel sales, Reebok International Ltd. scored a triple in the fourth quarter.
This story first appeared in the January 30, 2003 issue of WWD. Subscribe Today.
Its income tripled, that is. The company said Wednesday that its earnings for the quarter ended Dec. 31 skyrocketed 219 percent to $16.5 million, or 27 cents a diluted share, from $5.2 million, or 9 cents, in the year-ago quarter. Sales rose 14.8 percent to $762.8 million from $664.6 million.
Shares of Reebok closed at $30.50, down 20 cents, in trading Wednesday on the Big Board.
Total worldwide Reebok apparel sales for the quarter rose 31.7 percent to $281.8 million from $213.9 million. Apparel sales in the U.S. jumped 48.1 percent to $145.4 million, while footwear sales rose 6.2 percent to $194.9 million. Total international sales of Reebok-branded products increased 12.5 percent to $286.7 million, with apparel sales up 17.9 percent to $136.4 million and footwear sales up 8.1 percent to $150.3 million.
Paul Fireman, chairman and chief executive officer, said in a conference call that, despite the challenging retail environment, the company was able to achieve and surpass many of its goals from financial objectives to the successful NFL and NBA licensed lines.
The ceo said that the company is “confident, but not cocky,” and added that for the “first time in 10 years, making it to the top of the mountain doesn’t seem so far out of reach.”
Executives on the call disclosed that current goals include 2003 sales to increase in the “mid- to high-single-digit range” and for earnings per share to grow about “15 percent.” Most of the growth is expected to occur in the second half, when many economists and financial professionals expect the economy to turn around.
Reebok’s U.S. apparel sales include revenue from its sports licensing business. Executives disclosed during the call that they see substantial growth potential in that licensing business.
Reebok also said its total worldwide backlog of open customer orders scheduled for delivery from January through June for the Reebok brand is up 11 percent from last year.
Executives said Reebok will consolidate its European operations, unifying its marketing strategy and standardizing operations across Europe.
They also said the firm has increased its media budget for the core Reebok brand by 38 percent to support its new product initiatives. Those launches include the Rbk line, featuring the fusion of sports with music and entertainment, and its new “Above the Rim” cutting-edge basketball products.
This year, the company also will have a stronger presence in the Foot Locker retail chain, eating into Nike’s former domain. As reported, after February, Nike will no longer sell to the retailer its elite product in the U.S. Foot Locker also will not participate in any of Nike’s key footwear product launches.
For the year, income jumped 23.1 percent to $126.5 million, or $1.97 a diluted share, from $102.7 million, or $1.66, last year. Sales rose 4.5 percent to $3.1 billion.