The German sports equipment and clothing maker Adidas yesterday posted a profit for last year that exceeded its target, but the company warned that business would be tougher this year.
Adidas made a net profit of 642 million euros (US$800 million), an increase of 16 percent from the previous year and better than its goal of a 15 percent rise.
Analysts polled by Dow Jones Newswires had also forecast a more modest profit of 635 million euros.
In the fourth quarter of the year, the group’s profit more than doubled to 54 million euros from 21 million in the same period a year earlier, owing to a lower tax rate, the company said in a statement.
The strong results came mainly from the group’s Adidas line, while earnings at its Reebok and TaylorMade-Adidas golf divisions declined.
The troubled Reebok unit managed to clear away some of its backlog, but “as a result of higher clearance sales at lower margins,” the group said.
Overall sales for last year increased by 4.9 percent to 10.8 billion euros, the statement said, and management would propose an unchanged dividend of 0.50 euros per share.
It quoted chairman and chief executive Herbert Hainer as saying that the group’s results were “a testament to the underlying strength of our business model — being global, diversified and consumer focused.”
Lower earnings were foreseen this year however, the company said in its statement.
“We cannot ignore the unprecedented economic crisis all global businesses are facing today,” Hainer said. “I believe the real winners of this crisis will be the ones who remain consistent with their long-term strategies.”
The outlook for the sporting goods industry this year was “subject to a high degree of uncertainty,” the company said.
As a result, its business prospects were “difficult to forecast, especially with regard to the second half of the year.”
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