After seeing its market share and stock price "erode"
in recent years and new shoe designs "fall flat," MA-based
Reebok officials "finally are able to bask in the glow of
solid earnings," according to Matthew Brelis of the BOSTON
GLOBE, who writes that the company's first quarter profits
rose to $31.7M, or $0.56 a share, a 77% earnings increase
from $17.9M, or $0.32 a share, from the same period a year
ago. The "strong" first-quarter earnings "exceeded" Wall
Street's expectations, "even as sales dipped slightly."
Lehman Brothers analyst Robert Drbul: "They have definitely
turned a corner. The many initiatives they have implemented
in the last months have started to take hold. Their shoes
are selling better at retail, their Classics campaign is
working and there are high expectations about their blacktop
basketball shoe." News of the earnings "propelled" Reebok
shares up $1.50 yesterday, to close at $18.25 (BOSTON GLOBE,
4/26). Reebok Chair & CEO Paul Fireman: "The momentum has
clearly shifted." But Morgan Stanley Dean Witter analyst
Josephine Esquivel said that the company "benefited from"
lower interest and overhead costs. Esquivel: "They had a
good quarter, but it was a pretty (lousy) quarter last year.
When you bring up Reebok, retailers say they're doing
better, but everything is relative" (Greg Gatlin, BOSTON
HERALD, 4/26). While sales "dipped slightly" to $769.8M,
from $785.8M a year ago, Reebok announced that its selling,
general and administrative expenses fell to 30.5% of sales
from 32.1% last year (REUTERS, 4/25).
