PARIS — German activewear giant Adidas AG on Thursday said a decrease in taxes helped third-quarter net profits inch up 1.5 percent to 302 million euros, or $455 million at average exchange. Earnings per share rose 5.6 percent to 1.54 euros, or $2.32.
The second-largest activewear company after Nike reported that third-quarter revenues rose 4.8 percent, or 11 percent on a currency-neutral basis, to 3.08 billion euros, or $4.64 billion. Adidas sales grew 10 percent to 2.22 billion euros, or $3.34 billion. TaylorMade-Adidas Golf increased 3.5 percent to 197 million euros, or $296.8 million. Those increases offset a 9 percent slump in Reebok’s business to 1.59 billion euros, or $2.39 billion. On a currency-neutral basis, Adidas grew 15 percent, TaylorMade-Adidas Golf rose 12 percent and Reebok declined 1 percent.
Though the group maintained its 2008 forecasts of high-single-digit currency-neutral sales growth and net profit growth of 15 percent, Adidas withdrew its 2009 financial guidance, which included an operating margin target of 11 percent. That move sent the stock price down 9.6 percent to 26.64 euros, or $34.46, when the German exchange closed Thursday. Though optimistic that it can still grow sales and earnings in 2009, Adidas doesn’t expect to match 2008’s performance, the company said.
“It’s just a matter of time before the consumer panic and credit crunch we are watching escalate every day around the globe begins working its way into our industry and our business in a more profound way,” chief executive officer Herbert Hainer warned analysts during a conference call Thursday. Comparable sales are down for most retailers, he added, and the firm’s own retail sales are also slowing.
Reebok, which delivered disappointing sales and profits, is particularly vulnerable in the downturn. “Retailers are concentrating on brands that are a safe haven — mainly Adidas and Nike,” Hainer said, adding that retailers still have higher-than-desired levels of low-priced Reebok inventory. By March, the firm intends to have cleared out bargain-basement, unprofitable Reebok products, such as $29 sneakers, which once represented $200 million of the brand’s turnover, in order to focus on collections that lift the brand’s image.
Meanwhile, Adidas sales in China, where the Olympics drove a 50 percent increase, are expected to slow due to retailers’ high post-Games inventories. Buoyed by good business in Adidas stores, however, such as its Beijing flagship, which is attracting 200,000 visitors a month, the brand is opening several hundred new units in China. In Russia, meanwhile, Adidas now has 350 stores.
Adidas’ order backlogs, indicative of future growth, were up 4 percent in currency-neutral terms on Sept. 30. Reebok orders have declined 13 percent, but that figure excludes its own retail channels.
For the nine months, the group’s overall business grew by 4 percent, to 8.23 billion euros, or $12.53 billion, with North America the only region to suffer a sales drop. Net income grew 11 percent to 588 million euros, or $806.9 million, while EPS increased 14 percent to 2.96 euros, or $4.50.
While the group confirmed a high-single-digit sales growth target and raised TaylorMade-Adidas Golf’s forecast to high single digits, from a midsingle-digit increase, the group cut its outlook for Reebok, forecasting flat sales.
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion
Eighty degree temperatures and outdoor installations at the annual Art Basel Miami Beach called for bright, elevated beachwear. See more street style pictures on WWD.com. #theyarewearing #ABMB (📷: @lifeinreverie)
Following September’s emotional tribute to her brother Gianni, Donatella Versace wanted to bring the spring show’s deep sense of intimacy to her @versace_official pre-fall collection. Donatella found inspiration in Versace Palazzo in Milan and from Gianni’s opulent apartment. Archival patterns and new motifs were splashed on silk shirtdresses and fitted jersey frocks. See the rest of the photos on WWD.com. #wwdfashion
Demna Gvasalia continues to shake up the Paris fashion calendar — and experiment with new runway timetables for his @vetements_official brand. WWD has learned that Vetements plans to stage its next coed show for the fall 2018 season on January 19 during Men’s Fashion Week in the French capital. Details about the timing and venue have not been confirmed — stay tuned on WWD.com to catch the latest. #wwdnews (📷: @giovanni_giannoni_photo)
@zacposen's go-to holiday gift? Cookies! "I'll usually bake cookies and send them as a gift," said the designer, who recently released his cookbook "Cooking With Zac: Recipes from Rustic to Refined." Get the recipe for his Brown Butter-Chocolate Chip Cookies via link in bio 🍪🍪🍪 #wwdeye #cookingwithzac
For @monsemaison’s pre-fall 2018 collection, Fernando Garcia and Laura Kim honed in on the brand’s many signatures — men’s wear, which was tweaked and feminized through deconstruction, proportion play and lots of bare shoulders. See the rest of the photos on WWD.com #wwdfashion (📷: George Chinese)
On Friday night, @yohjiyamamotoofficial received the Design for Asia Lifetime Achievement Award in Hong Kong. The 75-year-old designer has been celebrated for many years and is best known for his dark and avant-garde tailoring. “In my long career, in design, architecture, [I’ve been to] so many parties, this is the very first time that I have such a warm feeling, I really appreciate this,” Yamamoto said. #wwdfashion (📷: @dominiquemaitre)