PARIS — Adidas AG said net profits increased 26.1 percent in 2006, but fourth-quarter earnings missed analysts' expectations as the German sportswear behemoth copes with the integration of Reebok.
Adidas AG, based in Herzogenaurach, Germany, said Wednesday that fourth-quarter net income was 13 million euros, or $17 million, compared with a 4 million euro, or $5 million, loss a year earlier. Still, the figure was below market expectations.
Fourth-quarter sales jumped 47.8 percent, to 2.25 billion euros, or $2.9 billion, from 1.52 billion, or $2 billion, a year earlier. Excluding Reebok, sales climbed 4.8 percent, to 1.59 billion euros, or $2.1 billion. Dollar figures are at the average exchange rate.
For the full year, driven by double-digit sales growth in all regions except Europe, profit rose 26.1 percent, to 483 million euros, or $609 million, on a sales increase of 52 percent, to 10.08 billion euros, or $ 13.6 billion, from 6.64 billion euros, or $8.3 billion, a year ago. Excluding Reebok, sales for the year increased 13.7 percent, to 7.55 billion euros, or $9.5 billion.
Herbert Hainer, Adidas AG chairman and chief executive officer, said in a statement that 2006 "was a truly exciting year for the Adidas Group, as we strengthened our brand portfolio by acquiring Reebok and exceeded the 10 billion euro sales mark for the first time in the group's history. Our performance at the 2006 World Cup was a standout in leveraging our brand strength, and we clearly delivered strong operational and financial results."
By segment, Adidas' year-end sales increased 13.1 percent, to 6.63 billion euros, or $8.6 billion, and sales at TaylorMade-Adidas Golf jumped 20.8 percent, to 856 million euros, or $1.1 billion. The first-time consolidation of Reebok added 2.47 billion euros, or $3 billion, in sales to the group. The Greg Norman apparel business, which was acquired with Reebok, also had a positive impact on group sales.
By region, group sales were up 31.4 percent in Europe, 107.2 percent in North America, 32.6 percent in Asia and 56.4 percent in Latin America.
Looking ahead, Adidas said it would concentrate on turning around its Reebok brand, which has been faced with falling sales and a weak order backlog. Adidas purchased Reebok for 3.8 billion euros, or about $4.8 billion in an attempt to close in on Nike, the world's leading sporting goods manufacturer.
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