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Thu, Aug 06, 2009 - Page 10 News List

Adidas second-quarter income plummeted 93%

CHALLENGES: The result still beat analyst forecasts of a loss. Chief executive Herbert Hainer expects performance to improve for the rest of the year

AFP , BERLIN

German sports equipment and clothing group Adidas reported a 93 percent dip in second-quarter profit, but confirmed its outlook for the full year.

Adidas said yesterday that April-to-June net profit dropped to 9 million euros (US$13 million) from 116 million euros in the same period last year.

The result was nonetheless better than a forecast loss of 2.2 million euros by analysts polled by Dow Jones Newswires.

Sales in the quarter fell 2.5 percent to 2.46 billion euros, mainly owing to weak results in Europe.

“Although there are still challenges ahead, I am confident that our results will improve as we go through the remainder of the year,” chief executive officer Herbert Hainer said in a statement.

The results highlighted a retail downturn associated with the global economic slowdown.

On Monday, German retailer Metro, the third largest worldwide, reported a 3.8 percent slump in second-quarter sales and said the full-year result would depend in large part on developments in weakening jobs markets.

For the first half of this year, Adidas said net profit fell 95 percent to 13 million euros on sales of 5.034 billion euros, down 2 percent. It said that sales were expected to fall by between 1 percent and 5 percent over the entire year.

A breakdown of the figures showed that first-half sales of the Adidas and Reebok brands fell 3 percent and 2 percent respectively, but the TaylorMade-Adidas Golf division turned in an 8 percent increase.

Hainer said the group “did not see any fundamental deterioration in our business since publishing our first quarter results.”

“As a result, I believe we have seen the bottom in our financial performance this year,” he added.

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