Adidas Q4 profits disappoint, 2006 record sales |
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| Friday, 08 June 2007 | |
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Despite a rise in Adidas' net profits of 26.1 percent in 2006, fourth quarter profits fell below analysts' expectations. The German sportswear giant said that net earnings for the quarter were up to €13 million, compared with a €4 million loss last year, but was still feeling the effects of its integration with Reebok. Sales for the quarter leaped 47.8 percent to €2.25 billion, although without Reebok, sales rose only 4.8 percent to €1.59 billion. Profit for the full year rose 26.1 percent – in all regions except Europe – to €483 million on sales up 52 percent to €10.08 billion. Group sales in Europe grew 32 percent. “2006 was a truly exciting year for the Adidas Group, as we strengthened our brand portfolio by acquiring Reebok and exceeded the 10 billion euro sales mark for the first time in the group's history,� said Adidas chairman Herbert Hainer in a statement. “Our performance at the 2006 World Cup was a standout in leveraging our brand strength, and we clearly delivered strong operational and financial results.� Sales at TaylorMade-Adidas Golf did particularly well, rising 20.8 percent to €856 million, while the Adidas brand itself saw sales climb 13.1 percent to €6.63 billion. Reebok's consolidation added €2.47 billion to group sales. By region, the US outperformed other regions with a 107.2 percent rise in sales, followed by 56.4 percent in Latin America, 32.6 percent in Asia and 31.4 percent in Europe. The group's main goal, looking forward, is to improve falling sales at the Reebok brand. It will also be working on its weak order backlog, which were adversely affected by transfer of licensed NBA and Liverpool businesses from Reebok to Adidas. The group is investing in marketing to lift brand communication. New products will be launched, particularly in running, branded apparel and women's apparel. It has also launched a new sportswear and footwear line designed by actress Scarlett Johansson. Hainer said that building Reebok in Europe and Asia was a priority, as the US market was already saturated. He said that the group as a whole expected “increasing momentum throughout the year.� www.adidas.com 8 March 2007 |
