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Adidas at High End of Forecast

BERLIN — Adidas-Salomon AG saw net earnings grow 10 percent to $247.8 million and sales rise 7 percent to $7 billion in 2002, according to preliminary figures released last week. <br><br>Earnings for the Herzogenaurach, Germany-based active...

BERLIN — Adidas-Salomon AG saw net earnings grow 10 percent to $247.8 million and sales rise 7 percent to $7 billion in 2002, according to preliminary figures released last week.

Earnings for the Herzogenaurach, Germany-based active sportswear group came in at the top end of the group’s forecasted earnings range, and translated to $5.45 a share compared with $4.98 in 2001. Adidas-Salomon said the increase was driven by both higher sales and gross margin improvements, and added that the acquisition of the remaining shares of Adidas Italy also contributed to the strong earnings picture.

The 2002 sales were the highest in the group’s history and, excluding currency fluctuation, growth was pegged at 11 percent versus the euro-based 7 percent. Currency neutral sales grew in all regions, with double-digit growth in both North America and Asia. The group said sales grew at Adidas and TaylorMade-adidas, but declined slightly at Salomon. Gross margin for the group advanced to 43.2 percent of sales from 42.6 percent, “as a result of increased Adidas own-retail activities, lower clearance sales and an improving product mix.”

Operating expenses represented 35.9 percent of net sales, 1.1 percentage points higher than in the previous year, but less than originally anticipated. As a result, operating profit grew to $516 million, up from $514 million in 2001. Lower financial expenses helped increase income before taxes 4 percent to $422 million.

Chief executive officer Herbert Hainer said: “In addition to record sales and double-digit earnings growth, we made important strategic progress as a group with development of new technological innovations and improved position in key markets. I’m convinced that this positive momentum will continue in 2003.”

Final full-year results will be released on March 11.