Reduced inventories help Reebok earnings
For the three months ending June 30, on sales of $717 million, profits were up 39 cents per share to $24.5 million – 9 cents per share ahead of analysts’ expectations - reaching $24.55 on the New York Stock Exchange on Wednesday.
Year-on-year, inventory was down to $408 million from $475 million.
"Our ability to manage our balance sheet has resulted in improved inventory turns, reduced days sales outstanding in accounts receivable and improved cash flow," chairman and CEO Paul Fireman said. He added that the company had increased its cash on hand by $270 million from the second quarter of 2001.
Sales growth was led by a 37% rise in the company's U.S. basketball business – and in particular the company’s Rbk and Iverson lines.
"As we entered 2002, one of the primary goals of the Reebok Brand was to continue to grow quality market share in the critical athletic specialty and sporting goods channels of distribution," Fireman said. "We are enjoying better than average sell-through results for many of our current Rbk products."
Sales worldwide of the core Reebok brand rose 2% to $585 million, with US sales increasing 6 percent to $334 million. Sales for the company’s Rockport subsidiary meanwhile were down 3% to $98 million.
While welcoming the results, analysts fear that the well-publicised troubles of troubled NBA star Allen Iverson (see leatherbiz.com story ‘Reebok supports Iverson 19.07.02) could hurt sales of Iverson-endorsed lines planned for launch later this year.
