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Adidas Net Strides Forward

NEW YORK — Adidas-Salomon ran up its second-quarter sales and profits while backlogs going into the back half of the year hit a nearly four-year high.<br><br>Earnings for the quarter strengthened 4.2 percent to $24.3 million, or 55 cents a share,...

NEW YORK — Adidas-Salomon ran up its second-quarter sales and profits while backlogs going into the back half of the year hit a nearly four-year high.

This story first appeared in the August 8, 2002 issue of WWD.  Subscribe Today.

Earnings for the quarter strengthened 4.2 percent to $24.3 million, or 55 cents a share, compared with $23.4 million, or 53 cents, a year ago.

Sales for the period ended June 30 were up 10.2 percent to $1.47 billion from $1.33 billion a year ago. Dollar figures have been converted from euros at current exchange.

In North America, backlogs were up 15 percent in local currencies, though down 2 percent in euros. Strength came primarily from footwear, which saw the measure rise 27 percent, which translates to an 8 percent uptick in euros. Apparel backlogs were up 1 percent in constant currencies, the business’ first increase in more than three years. In euros apparel backlogs fell 14 percent.

In Asia and Europe, backlogs in constant currencies were up 21 and 7 percent, respectively. “What is most important for us is the strong sales outlook reflected in the Adidas [brand total] order backlogs, which are up 11 percent on an underlying basis,” said Herbert Hainer, chairman and chief executive in a statement. “This is the biggest increase since 1998.”

For the half, profits dipped 4.2 percent to $62.2 million, or $1.46 a share, from $69.1 million, or $1.52, a year ago. Revenues increased 7.4 percent to $3.06 billion from $2.85 billion a year ago.

Apparel sales during the half shot up 10 percent to $1.07 billion from $970 million a year ago. The growth was driven by soccer merchandise, which saw an 85 percent increase with help from the World Cup. Footwear sales climbed 7.1 percent during the half to $1.46 billion from $1.36 billion a year ago.

“With the majority of our expenses now behind us, we expect business to accelerate in the second half of the year, particularly in earnings growth,” said Hainer.

The ceo rubber-stamped previous estimates for the full year of at least 5 percent sales growth and a 5 to 10 percent rise in profits.

In other news, Adidas named Ross McMullin, who joined the firm as president of Adidas America in July 2001, to its board. McMullin’s appointment expanded the board to seven members. A statement said the move underlined the firm’s “commitment to North America, the biggest sporting goods market in the world, where the company is anticipating double-digit sales in 2002.”