Low dollar effects Puma and Adidas

financial situation of America . The retailer announced its net income over the second quarter of the year went down with almost 10% to €45.2 million.

 Initially, analysts predicted the company to make a net profit of €47.4 million. The Adidas Group played more into the fluctuating market, but last year its revenues still went down from €1.592 billion to €1.429 billion, which made the income drop with 10%. In contrary to America , Adidas managed to maintain its markets in the rest of the world and even increased its gain with 28% in Latin America . Subsidiary company Reebok also managed to compensate the disappointing sale numbers of 1% with cutting its costs of the second quarter with 27%. The total turnover of this quarter got down to €104 million.

According to Adidas, the profit could have increased with 6% instead of the 1%, if the dollar hadn't dropped so dramatically. For the future sport retailers shouldn't count too much on the opportunities and growth of the American market. To expand and increase profits, the economy looks much more interesting in Asia . For example Adidas gained 7% more turnover in the previous quarter. The CEO of The Adidas Group, Herbert Hainer, is going to focus on the Olympics 2008 which are taking place in Beijing as it will be one of the most interesting sport events in the world for the second half of 2007.

To prevent low profits in the future, sport companies should stay close to their core business. Like the fluctuations of the dollar, fashion trends are not reliable either. Adidas mainly focussed on the sports market and this is where it gained its growth. The fastest growing sports segment of previous quarters was golf.