SBD/Issue 89/Finance

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  • Reebok Shareholders Approve adidas-Salomon Merger

    Adidas, Reebok Hope To
    Close Merger By Month’s End
    Reebok shareholders approved the $3.8B takeover of the company by adidas-Salomon by a 98% margin, “a day after adidas won European Union regulatory approval,” according to William McCall of the AP. No “antitrust objections were raised” by U.S. regulators. Reebok said the companies expect the deal to close by January 31, “a quick conclusion they hope will end the uncertainty that had hurt sales and orders to retailers.” Reebok “acknowledged three months ago that uncertainty about integration plans had hurt sales,” which dropped to $912M in Q3 ’05 from $1B in Q3 ’04. adidas “plans to keep the brand identities separate ... and focus on expanding Reebok sales in Europe and Asia.” adidas Head of Corporate & Global PR Jan Runau noted those are areas “where Reebok is relatively small and adidas is very strong.” Runau said that the merger “should save adidas about $25[M] a year in production and supply-chain costs within three years.” Susquehanna Financial Group analyst John Shanley noted Nike in ’05 lost the market share leadership position in Japan to adidas for the “first time in well over a decade,” while sales have grown in the U.K., Germany and Southern Europe. Shanley said Nike is “either treading water or losing position” in those markets. Runau said that Reebok’s HQs “will remain in Massachusetts, while adidas will maintain its separate U.S. [HQs] in Portland” (AP, 1/26). Nike, adidas and Reebok U.S. teen buyer demographics.

    Print | Tags: Adidas, Finance, Nike, Reebok
  • Narrow Fairway: Callaway Posts Lower Q4 Net Loss Than In ‘04

    Callaway Golf posted a “narrower loss” in Q4 ’05 than in the year-ago period and beat Wall Street expectations as the company “continued restructuring efforts and sales improved,” according to REUTERS. The company’s net loss was $18.7M, or $0.27 a share, compared to a loss of $28.5M, or $0.42 a share, a year ago. Analysts expected a loss of $0.37 per share. The results include a “charge of [$0.05] a share related to the integration of” Top-Flite’s operations and ongoing restructuring. Callaway’s Q4 sales rose 7% to $154.5M, compared to $144.4M in the year-ago period, slightly under Wall Street expectations of $157.4M. Callaway is “in the midst of a companywide reorganization effort that is expected to save it $70[M] before taxes over two years.” For FY ’05, sales rose 7% and the company posted a net profit of $13.3M, or $0.19 per share, compared to a loss of $10.1M, or $0.15 per share, in ’04 (REUTERS, 1/26). In San Diego, Mike Freeman reports the $13.3M profit “is among the company’s smallest since it became publicly traded” in ’92. However, Callaway execs “think the company is now on solid footing to improve this year” (SAN DIEGO UNION-TRIBUNE, 1/26). At presstime, shares of Callaway were trading at $14.78, up .82% from yesterday’s close (THE DAILY).

    Print | Tags: Callaway Golf, Finance
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