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Author: gunsightpass Big red star, 1000 posts Old School Fool Coverage Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 129  
Subject: Re: The Five Minute Test Date: 4/22/2004 5:10 PM
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Thanks for the analysis lostpros. First quarter earnings were released today and it looks like revenue growth is somewhat of an issue for Reebok. Overall revenue did grow 4% but that if you take out the impact of currency sales actually declined by 1%. I think this will be something to keep a close eye on.

Fireman did emphasize that the company still hopes to grow revenue in the single digits and earnings in the range of 15% for the year

A quick recap of the report:

Positives
Gross Margin increased 210 basis points to 40.2%
Inventories actually decreased by 2%
Running lines seem to be gaining momentum
Reaffirmed guidance for 15% earnings growth

Negatives
Revenue growth of 4% (-1% at constant currency)
Quarter was negatively impacted by the bankruptcy of Footstar
Results of international Operations was disappointing
SG&A increased to 32% from 29.6% ($30 million)Fireman stated that the increase was due to increased advertising and marketing as well as investment in supply chain and IT for the long term good of the company


Overall I am disappointed in the quarter but not ready to abandon the ship at this point. I would also like to take a look at the 10Q when it becomes available.


One other update. Reebok did sign Eli Manning, Kevin Jones, Kellen Winslow and Sean Taylor, all future NFL draft picks with.


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