NEW YORK — Robust apparel sales led Reebok International Ltd. to generate double-digit profit gains in the first quarter.
For the three months ended March 31, the Canton, Mass.-based athletic footwear and apparel titan posted a 10.2 percent climb in net income to $40.8 million, or 63 cents a diluted share, matching Wall Street’s consensus estimate. By comparison, the company earned $37.1 million, or 51 cents, in last year’s comparable quarter. Excluding a 7 cent charge for a change in accounting principle, prior-year EPS would have been 58 cents.
Revenues for the period rose 8.5 percent to $798.3 million from $736 million last year. Apparel sales showed the greatest growth, increasing 16.4 percent to $249.3 million from $214.1 million. Total company footwear sales ticked up 5.2 percent to $549 million from $521.9 million a year ago.
Much of the vigorous apparel sales showing was attributable to the firm’s new professional sports licensing business.
"Replica NBA and NFL products are only part of the success we are experiencing in this new category for us," said chief executive officer Paul Fireman in a statement. "We have introduced many new product extensions for the NBA and NFL, including footwear, classic products, women’s wear, training gear and leisure wear. These categories are important to our stated goal of transitioning the product offering for these two great leagues into a year-round, multidimensional apparel, footwear and accessories business."
In the U.S., Reebok brand apparel sales shot up 24.3 percent to $89.5 million from $72 million last year, while international apparel revenues under the label increased 12.6 percent to $145.4 million from $129.1 million.
Other positive operating indicators included a gross margin expansion of 20 basis points to 37.4 percent of sales from 37.2 percent last year, and a 10 basis point decline in selling, general and administrative costs to 28.9 percent of sales from 29 percent.
Looking ahead, Reebok said that its total worldwide backlog of open customer orders scheduled for delivery from April through September of this year for the Reebok brand increased 15 percent from the prior year’s comparable amount. On a constant dollar basis, worldwide backlog of open customer orders for the Reebok brand increased by 9 percent.Reebok also reiterated its full fiscal year guidance of an approximately 15 percent increase in earnings per share on mid- to high-single-digit sales growth.
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