USA: Reebok Q3 Profit Lifted By Sale Of Footwear Unit
Sportswear company Reebok International said it enjoyed a 44 per cent hike in third-quarter profit, boosted by the sale of the Ralph Lauren footwear unit, but said
sales had slipped during the quarter.
Reebok said net income for the quarter ended 30 September totalled $117.7 million compared with income of $81.8m in the same period last year, helped by an after-tax gain of $49m from the sale of the Ralph Lauren business.
However, net sales dropped from $1.16 billion to $1.04bn, which Reebok blamed on "retailer uncertainty" over the planned merger with the company's bigger rival, adidas.
Chairman and chief executive officer Paul Fireman said the company's strategy to reposition its relationship with the Footlocker business had also had an impact on the results.
He said: "As we noted last quarter, we are working on repositioning our business with one of our major customers, Footlocker, by shifting some of our Classic business at Footlocker into new Performance categories that we believe will stimulate consumer demand.
"Footlocker has also announced plans to reduce their inventory levels over the balance of 2005, and we have been working with them to help them achieve this.
"While in the short term this is negatively impacting our operating results, we believe our strategy to reposition our business with Footlocker will help to improve our operating margins in the future", Fireman added.
The company has been working to consolidate its Reebok product and marketing groups under one leader.
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