PARIS — Adidas-Salomon AG on Wednesday said a pickup in the U.S. market along with strong growth in Asia drove third-quarter profits up 19 percent.
But the German footwear and apparel company gave disappointing order outlooks for Europe, and its stock lost 2.15 percent to close at 111.79 euros, or $143.35, in trading on the Deutsche Börse in Frankfurt.
Adidas said net income for the three months ended Sept. 30 was 179 million euros, or $218.9 million, up from 150 million euros, or $169 million, a year ago, as sales gained 5 percent to 1.95 billion euros, or $2.38 billion. Figures have been converted using average exchange for the corresponding periods.
Adidas chief executive Herbert Hainer said the firm was “on track” to reach a full-year earnings target for 20 percent growth.
Adidas said overall order backlogs in the quarter grew by 2 percent, driven by a 23 percent increase in Asia. But the company reported a 4 percent decline in order backlogs for Europe.
“This shortfall was mainly due to the increasingly difficult retail environment in most major markets,” Hainer said.
Hainer said backlog orders would also fall short in the fourth quarter because of “the situation in Germany and Italy.”
He remained confident that orders would improve in early 2005. Adidas said it expects earnings growth of 10 to 15 percent in 2005.
Meanwhile, Adidas said it would recall 200,000 sneakers. It said the return of the Superstar Ultra and Pro Team Voluntary models would cost between 5 million and 10 million euros, or $6.4 million and $12.8 million.
— Emilie Marsh
This story first appeared in the November 4, 2004 issue of WWD. Subscribe Today.