Adidas Earnings, Sales Slip in Q3

Sportswear giant says momentum to return in Q4 and reconfirms full-year guidance.

BERLIN — Adidas posted declines in profits and revenues in the third quarter, citing negative currency effects, unanticipated distribution constraints in Russia and the former Soviet republics, as well as ongoing weaknesses in the global golf market.


Net income dropped 8 percent to 316 million euros, or $418.6 million, in the three months ending Sept. 30, while operating profit slipped 6 percent to 463 million euros, or $613.3 million. Group sales declined 7 percent to 3.88 billion euros, or $5.14 billion. On a currency neutral basis, group sales for the quarter were flat.


Dollar figures are converted from euros at average exchange rates for the period in question.


Strong sales momentum in Latin America, where currency-neutral sales grew 12 percent, and greater China, which saw gains of 9 percent, offset declines in Western Europe and North America, which were down 6 percent and 5 percent respectively.

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The sporting goods giant noted that in Western Europe, it was up against high comps related to sell-in of products linked to the London 2012 Olympic games, as well as ongoing economic challenges in the region. The group’s U.S. business was mainly impacted by lower sales at Taylormade-Adidas Golf.


By brand, third-quarter sales for Adidas were stable on a currency-neutral basis, Reebok grew by 5 percent, and Reebok-CCM Hockey gained 4 percent. TaylorMade-Adidas Golf sales slid 16 percent, and Rockport sales were down 4 percent.


Expecting top-line momentum to improve in the fourth quarter, Adidas reconfirmed its full year guidance, as adjusted in September. Group sales are forecast to grow at a low single-digit rate, and gross margin is expected to increase to between 48.5 and 49 percent, compared to 47.7 percent in 2012. Net income attributable to shareholders is expected to reach 820 million to 850 million euros, compared to $791 million euros in 2012.