SBD/12/Finance

SIGN OF THE TIMES? REEBOK REPORTS DIP IN '97 NET INCOME

          Reebok yesterday "surprised Wall Street by predicting
     that 1997 would not ... be the year of the turnaround,"
     according to Kimberly Blanton of the BOSTON GLOBE. 
     Reflecting a "losing battle for market share" against Nike
     "in a soft athletic shoe market," Reebok "estimated" it
     would earn $2.25 to $2.35 per share in '97, translating into
     net income ranging from $131.5M to $137.5M for '97.  The '97
     estimate is below '96 earnings, and Blanton adds that Reebok
     earned "nearly twice as much" in '94.  Shares of Reebok's
     fell 3 3/16, closing at 29, after hitting a 52-week low of
     28 1/2 during the day (BOSTON GLOBE, 12/12).  Per share
     earnings estimate were "as much as 10% lower than analysts'
     expectations" of $2.50 (WALL STREET JOURNAL, 12/12).
          FROM THE HOME OFFICE: Reebok CEO Paul Fireman: "As
     everyone in our industry is aware, there has been a recent
     softening in demand at retail for the athletic footwear and
     apparel market as a whole, which has resulted in a back-up 
     in retail inventories.  We expect this softening and
     inventory back-up to negatively impact our anticipated
     fourth quarter results and, accordingly, have reduced our
     expectations for the full-year 1997" (Reebok). 
          PINCHING PITCHMEN? After the earnings report, Reebok
     said it "plans to cut the number of sports personalities on
     its endorsements roster" (AP/AKRON BEACON JOURNAL, 12/12). 
     Reebok Dir of PR Dave Fogelson "won't say who, or how many 
     ... athletes might go," adding, "We are in a position to
     work with fewer individual endorsers without diminishing our
     on-court presence" (Michael Hiestand, USA TODAY, 12/12).
          ONE ANSWER TO THE WOES: Sales of Reebok's new Allen
     Iverson shoe, "The Answer," have "fouled out," and analysts
     have blamed Reebok's drop in earnings on "poor sales" of the
     shoe, according to Davies & Moran of the PHILADELPHIA DAILY
     NEWS.  PA-based Shin's Athletic Foot Wear Owner Mike Shin
     called the shoe "dead."  Iverson's Reebok rep Henry Gaskins
     said that while the shoe is "selling below projections, he
     does not expect it to be a complete failure."  Gaskins: "The
     shoes are doing pretty well, they are just not performing as
     good as we expected.  Allen is still as popular as he was
     before.  And we don't have any plans to change any of our
     advertising or marketing for Allen." Davies & Moran add that
     local sneaker store operators said part of the problem with
     Iverson's shoe is that "consumers think it is ugly" (Davies
     & Moran, PHILADELPHIA DAILY NEWS, 12/12).
          WHY THE SLUMP? Morgan Stanley's Josi Esquivel said
     Reebok "is still too dependent" on a few lines of sneakers,
     adding, "They don't have a breadth and depth of product"
     (WALL STREET JOURNAL, 12/12). In N.Y., Richard Wilner
     reports that Reebok expects a soft sneaker market "until at
     least" midway through '98 (N.Y. POST, 12/12).  

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Finance, Nike, Reebok

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