Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next
Author: TMFTwitty Big funky green star, 20000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 129  
Subject: Reebok's Stutter Step Date: 4/23/2004 3:43 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
http://www.fool.com/News/mft/2004/mft04042315.htm?ref=btp

Reebok's Stutter Step

By Seth Jayson
April 23, 2004

The stutter step, a momentary break in stride, is a great way to throw off the competition. Just ask any decent halfback or wide receiver. But sometimes, the stutter is unintentional, and whether it's helpful or disastrous depends on what comes next.

No. 2 athletic shoe maker Reebok International (NYSE: RBK) didn't look so nimble on its toes yesterday, when the first-quarter results hit the wire. Net sales barely eked skyward, and that 4% uptick turns into a 1% backslide when you factor in the effect of foreign exchange.

Earnings were flat compared to last year, at $0.63 per share. This was a pretty big disappointment compared to the fabbo numbers the firm put up in January, and they don't stack up to the recent showing from Nike (NYSE: NIK). If I didn't know better, I'd wonder if Reebok's other, much more enthusiastic press releases were meant to distract us from these snoozers.

U.S. apparel sales had the strongest growth for the firm, at 9.4%, but it wasn't enough to make up for the constant-dollar sales declines all across the international business -- an area where Nike showed some relative strength.

Still, I'm partial to this underdog, and investors should be encouraged by the 2.1% increase in gross margins, plus double-digit growth in the premier running and retro lines. Management promised to commit more resources to advertising in the coming months, so the firm needs to capitalize on its stable of popular-culture icons like Shakira, Eve, 50 Cent, and Jay Z. In a time of record consumer spending, investors have a right to expect solid sales growth, and all eyes are on Reebok to see what happens when the next shoe drops.

Is Reebok going to drop the competition or take a big digger? Discuss it on the Fool's Reebok International board.

Fool contributor Seth Jayson runs in Mizunos, but he's got love for Reebok, too. He has no stake in any company mentioned above. View his Fool profile here.

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next

Announcements

Post of the Day:
Value Hounds

Medallion Financial: TAXI!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement