Adidas’ fourth-quarter profits fell 63.8 percent as the athletic firm took writedowns on its Reebok business and weathered a sales decline, but chief executive officer Herbert Hainer said the company was ready to go on the market offensive.
Fourth-quarter profits attributable to Adidas shareholders fell to 19 million euros, or $28.1 million, from 54 million euros, or $71.2 million, a year earlier. Sales for the three months ended Dec. 31 decreased 4.5 percent to 2.46 billion euros, or $3.63 billion, from 2.57 billion euros, or $3.39 billion.
Operating expenses during the quarter included writedowns to the Reebok retail business and the brand’s Chinese distribution rights that totaled 33 million euros, or $48.7 million. Adidas acquired Reebok in 2006 and has to periodically adjust the value of the business under accounting rules.
For all of 2009, profits fell 61.8 percent to 245 million euros, or $341.7 million, from 642 million euros, or $944.6 million, in 2008. Sales slid 3.9 percent to 10.38 billion euros, or $14.48 billion, from 10.8 billion euros, or $15.89 billion. Dollar figures were converted from the euro at average exchange for their respective periods.
Even though Hainer described 2009 as the toughest year Adidas has faced in his nine years as ceo, he said the company was in a healthy financial position and poised to make its move.
“I am convinced that all our brands can capitalize on a rebounding consumer environment in the current year,” he said. “In 2010, we will go on a marketing offensive.”
The three-pronged approach includes an effort to take advantage of the FIFA World Cup to boost sales of soccer merchandise, plans to launch a global campaign for Adidas Sport Style to capture more lifestyle consumers and a focus on Reebok toning and conditioning merchandise in an effort to return that brand to growth this year.
This year, currency neutral sales are slated to rise by a percentage in the low- to midsingle digits.
Shares of the firm slid 4.1 percent to 36.47 euros, or $49.42, in Frankfurt Tuesday.
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