Reebok Runs Right

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Reebok's (NYSE: RBK) earnings report yesterday could make famed Office Linebacker Terry Tate even more excited. America's No. 2 maker of athletic footwear put up some impressive numbers, showing strong gains across all product lines and generating a 12% jump in sales.

Fourth-quarter earnings per share rose 63% and full-year EPS expanded 19%, excluding adjustments. But the good news didn't end there. Fourth-quarter gross margins improved 50 basis points. (Sounds huge? Relax, that's half a percent, but still good.) Inventories were down, too, reflecting efficient management.

As Fool colleague LouAnn Lofton has noted, Reebok's been making strong moves away from the hoop recently, signing rappers like 50 Cent and Jay Z to shoe endorsements. There was even that odd-but-eye-catching deal with cross-cultural spokes-tart Shakira, capitalizing on demand for retro kicks from the '80s.

Those bets are paying off. The urban-infused RbK line is on a tear, notching a 48% sales increase for the full year and bringing it up to 15% of Reebok's total U.S. footwear sales. But investors should also be cheering the company's successful return to performance footwear. The new Premier Series running line has gotten rave reviews and led the performance division to a 15% increase. That's important because, unlike fickle teenagers, runners are loyal to their shoes and they're not likely to switch just because Brand X inks a poster deal with the new hottie-of-the-month. And remember, runners buy several pairs per year.

Earlier this month, shares of Reebok neared $41, a 33% gain from last January. Whatever your position on the stock, the company's survival-turned-success shows there's plenty to gain by doing things differently than industry elephant Nike (NYSE: NKE).

Wondering about the right running shoe for you? Check out our Running Fools discussion board.

Seth Jayson can't wait for the new Terry Tate video. Send your TPS reports to FoolS@sethj.com. And don't forget the cover sheet, Fool.