PARIS — Impacted by higher sales and marketing expenses, Adidas AG said fourth-quarter net profits slid 64.3 percent to 7 million euros or $9.5 million, versus 19 million euros, or $28.1 million, in the year-ago period.
Sales in the quarter rose 19.2 percent to 2.93 billion euros, or $3.99 billion, for the group, which is the world’s second-largest sporting goods maker after Nike Inc.
The group raised its growth target for 2011, however, motivated by improved consumer confidence, high exposure to fast-growing emerging markets and continued momentum at the Reebok brand.
Adidas AG guided currency-neutral annual sales to increase in the mid- to high-single-digits, and said it expects to outperform global economic growth. “We have every right to be confident about the sustained momentum of our group going forward,” said Herbert Hainer, Adidas Group’s chief executive officer.
Citing an improving worldwide economy and a strong rebound for the group since the economic crisis and difficulties of 2009, Hainer stated: “Our fourth-quarter performance rounds off an excellent year for the Adidas Group.…I am proud to report that our group is in fantastic shape.”
Full-year net income more than doubled for Adidas AG, rising 131 percent, to 567 million euros, or $752.1 million, versus 245 million euros, or $341.7 million, in 2009. This was boosted by strong sales growth in the group’s wholesale and retail segments, which saw respective sales increases of 14 and 25 percent — to 8.18 billion euros, or $10.86 billion, for the wholesale segment, versus 7.16 billion euros, or $10.58 billion in 2009, and to 2.39 billion, or $3.17 billion, for the retail segment, from 1.91 billion euros, or $2.82 billion in 2009.
Comparable retail store sales increased 11 percent, with the total number of stores growing to 2,270 by the end of year 2010, from 2,212 at the end of 2009.
Adidas AG said full-year sales increased 15 percent to 11.99 billion euros, or $15.92 billion, versus 10.38 billion for full-year 2009.
Dollar figures are converted at average exchange rates for the periods to which they refer.
The group said full-year sales in North America significantly exceeded targets, climbed 19 percent, with strong increases in both the U.S. and Canadian markets. The Adidas and Reebok brands saw 14 and 22 percent upticks in sales in the region, versus 2009, respectively, with among best-selling ranges Adidas’ Lightweight line, which saw double-digit sell-throughs, and Reebok’s Toning and ZigTech lines. “Our mission to create a closer connection to the next generation athlete and to increase our prominence in the important mall channel is clearly taking shape,” said Hainer.
Adidas AG in 2010 significantly increased its market share in Europe, with strong growth in the region’s emerging markets, notably Russia, where Adidas is the leading sporting goods brand, followed by Reebok.
Offsetting weak sales in the Greater China region, which inched up 3 percent, sales in Latin America rose 28 percent, with double-digit increases in most of the region’s major markets.