Adidas net earnings down, sales up

Sportswear giant Adidas has reported a decline in net income of 11 percent to €128 million, on sales up 9 percent to €2.5 billion for the first quarter. The results were in line with expectations, as the firm reiterated its financial outlook for the year. Operating profit dropped 8 percent to €229 million, while pre-tax profit fell 13 percent to €191 million.

The company said both the Adidas and Reebok divisions drove sales. Adidas revenues rose 7 percent, while Reebok sales soared with 22 percent. Adidas did say that “as in the first quarter of 2007, three months of Reebok's revenues are consolidated versus only February and March in the prior year. On a like-for-like basis, comparing the full three-month periods and excluding the transfer of the NBA and the Liverpool licensed businesses to brand Adidas, currency-neutral Reebok sales declined by 5 percent.�

Nevertheless, sales grew strongly in nearly all regions, particularly Latin America (up 36 percent) and Asia (up 13 percent). European sales rose 10 percent, but North American sales remained flat. “ Our group has gotten off to a strong start in 2007," said chairman and chief executive Herbert Hainer in a statement. "The Reebok integration is beginning to pay off as we realize the first revenue and cost synergies. Adidas and TaylorMade-Adidas Golf impressed with strong product launches.�

www.adidas.com 9 May 2007