Most Recent Articles In Business
Latest Business Articles
- Valentino Logs 9.4 % Increase in First-Quarter Revenues, to Realign Prices in Asia
- Clessidra in Binding Negotiations to Sell 100% of Capital
- Bottega Veneta Unveils Parco Palladiano Fragrances
More Articles By
Shares in Adidas Group closed up 4.7 percent at 76.38 euros on the Frankfurt Stock Exchange as an upbeat sales forecast overshadowed a swing to losses in the fourth quarter.
This story first appeared in the March 8, 2013 issue of WWD. Subscribe Today.
The net loss totaled 273 million euros, or $354.1 million, which Adidas attributed to goodwill impairment of 265 million euros, or $343.7 million, resulting mainly from adjusted growth assumptions for Reebok in North America, Latin America and Brazil especially, as well as an increase in country-specific discount rates following the euro debt crisis.
Sales in the three-month period rose 4 percent to 3.37 billion euros, or $4.37 billion. Stripping out the impact of currency fluctuations, the increase stood at 1 percent.
Dollar figures are converted from euros at average exchange rates for the period in question.
The fourth quarter was boosted by net sales gains in Greater China, which were up 19.4 percent, as well as in European emerging markets, up 13 percent, where “the middle market consumer is growing at a rapid pace,” chief executive officer Herbert Hainer said.
North America and Western Europe struggled, reporting net sale losses of 3.4 percent and 2.2 percent, respectively.
Hainer said the company would open more shops-in-shop in the U.S. for a stronger presence and to bolster sales.
The sporting goods firm, headquartered in Herzogenaurach, Germany, is forecasting sales to grow at a midsingle-digit rate in 2013 from 2012’s record of 14.98 billion euros, or $19.16 billion, which is expected toward the second half of the year.
“We are very well positioned to again achieve record sales in 2013,” Hainer said.
He added that the year ahead would also see a “step change in the pace of operating margin expansion,” which is expected to approach 9 percent versus 8 percent in 2012.
Earnings per share are expected to climb between 12 and 16 percent to between 4.25 and 4.40 euros in 2013.
The group cited its “high exposure” to fast-growing emerging markets as well as further expansion of retail as strong sales growth factors. New product launches and innovations in all major units are also envisaged throughout 2013, which will “more than offset the nonrecurrence of sales related to the UEFA Euro 2012 and the London 2012 Olympic Games,” the group noted.
The group’s full-year net income fell 13.8 percent to 524 million euros, or $673.7 million. The contraction resulted primarily from a 14 percent net sales decline by the group’s Reebok brand, where “commercial irregularities” were discovered at its Indian division last April. The brand was also battered by the loss of an American Football League contract and a players’ dispute at the National Hockey League, which resulted in a short season.
Net sales were still up 11.7 percent to a new record level of 14.98 billion euros, or $19.16 billion.