NEW YORK (CNNfn) - Reebok International Ltd. posted better-than-expected fourth-quarter profits Wednesday, reflecting increased sales overseas and cost cutting efforts.|
The company reported a profit of $426,000, or 1 cent a share, before one-time items, compared with a loss of $7.1 million, or 13 cents a share, in the year ago quarter.
The company was expected to lose 3 cents a share, according to analysts' expectations compiled by First Call/Thomson Financial.
Net sales for the fourth quarter were $622.8 million down from $705.6 million a year ago. In the United States, sales of Reebok footwear fell 19.5 percent, while apparel sales tumbled 34.5 percent. However, sales of Polo Ralph Lauren Footwear rose 17.7 percent to $21.9 million.
Sales of the Reebok brand outside the U.S. increased by 1.3 percent to $264 million on a constant dollar basis.
International sales rise slightly
"Internationally, our business improved as compared with the prior year as a result of our business re-engineering efforts and improving economics in much of Asia Pacific. In Europe, we experienced market share gains in several countries and are pleased that for the sixth consecutive quarter we reported growth in our backlog on a local currency basis when compared to the prior year," Paul Fireman, Reebok's chairman and chief executive said in a statement. " During 1999 we took steps to reduce our operating costs by simplifying many business processes and focusing our efforts on fewer activities."
Reebok (RBK: Research, Estimates), once the No. 1 athletic shoe maker in the world, has been hit by declining sales and turmoil in its management. It has seen its 22 percent share of the U.S. sport shoe market in the early 1990s shrink to 13 percent last year, as Nike Inc. and others stole customers.
"We're happy to be done with 1999, no doubt about it," said Kenneth Watchmaker, Reebok chief financial officer.
"While we face a difficult retail environment, and I'm not declaring any victories yet, I do feel that we can focus on generating some top-line growth," he added.
For the year, Reebok reported a profit of $50.49 million, or 89 cents a diluted share, before one-time items. That compares with $47.6 million, or 83 cents per diluted share, before one-time items. Revenues fell to $2.9 billion from $3.2 billion. Including one-time charges, Reebok earned $11 million, or 20 cents a share, in 1999, versus $23.9 million or 42 cents a share in 1998.
The company's fourth quarter earnings statements came out Wednesday after the markets closed. Shares of Reebok closed Wednesday on the New York Stock Exchange at 7-1/8 down 3/16.
-- from staff and wire reports