Need more evidence that Reebok (NYSE:RBK) is beatingNike (NYSE:NKE) at its own game? Look no farther than today's second-quarter earnings release.
Aside from the 12% total sales growth and earnings-per-share growth (excluding a one-time item in last year's Q2) of 28%, Reebok's backlog of U.S. futures orders for the July-December period is up a healthy 11.9%. That stands in contrast to Nike's Q4 announcement that its futures orders for the U.S. declined 10%.
The concern over futures and whether Reebok would be hurt by rising inventories and stuffed retail channels prompted one Merrill Lynch analyst to downgrade the company yesterday. Whoops.
Reebok's U.S. footwear futures orders jump of 13.4% is the first double-digit pop the company's had in over five years. And inventories? Excluding currency gains, they rose just 5%. Part of that growth also reflects Reebok's continued ramping up of its sports licensing business.
Nike's not sitting idly by, however. It's been on the prowl lately, snapping up Converse in a bid to grab more of the "retro" footwear craze and signing basketball phenoms LeBron James and Carmelo Anthony for what some would argue was an "irresponsible" amount of money.
Reebok may be bummed that it missed out on James, but it must be privately pleased that it passed on another big-name basketball star whom Nike signed to a $40 million endorsement deal last month. If we need to spell out his name (K-O-B-E), you've been living CNN-free for the last month.
Nike's trying to regain some traction with all its wheeling and dealing, and reverse course on its futures orders. Meanwhile, Reebok plans to keep the momentum going. The company stood by its 2003 fiscal-year outlook today, calling for sales growth in the mid- to high-single-digit range and earnings growth of 15%.
LouAnn Lofton owns shares of Nike.
