Adidas AG reported a net income decline that was in line with expectations Tuesday on strong sales, which led the company to reconfirm its financial outlook for the year.
Net income attributable to shareholders fell 11 percent to 128 million euros, or $168 million, on sales that swelled 9 percent to 2.5 billion euros, or $3.3 billion. Dollar figures are at the average exchange rate, while percent changes for the euro figures were done by Adidas with a currency-neutral calculation.
Operating profit for the group shed 8 percent to 229 million euros, or $300 million, while income before taxes dropped 13 percent to 191 million, or $250 million.
"Our group has gotten off to a strong start in 2007," said chairman and chief executive officer Herbert Hainer in a statement. "The Reebok integration is beginning to pay off as we realize the first revenue and cost synergies. Adidas and TaylorMade-Adidas Golf impressed with strong product launches."
The company said the Adidas and Reebok business segments drove first-quarter sales. Adidas gained 7 percent on a currency-neutral basis, while Reebok rose 22 percent. The company added that "as in the first quarter of 2007, three months of Reebok's revenues are consolidated versus only February and March in the prior year." So, on a like-for-like basis, "comparing the full three-month periods and excluding the transfer of the NBA and Liverpool licensed businesses to brand Adidas, currency-neutral Reebok sales declined by 5 percent," the company said.
In addition, the group said currency translation effects "negatively impacted sales at all brands in euro terms." In euros, Adidas sales rose 2 percent to 1.82 billion euros, or $2.4 billion, while sales at Reebok gained 15 percent to 524 million euros, or $687 million.
By region, sales were flat in North America at 698 million euros, or $915 million; up 10 percent in Europe to 1.15 billion euros, or $1.5 billion, and up 13 percent in Asia to 501 million euros, or $657 million. In Latin America, sales gained 36 percent to 157 million euros, or $205 million.
A Stella McCartney sketch of a custom dress made from protein-based silk in partnership with biotech lab Bolt Threads. The dress will be displayed at The Museum of Modern Art's upcoming design exhibition, "Items: Is Fashion Modern?"