PARIS — Adidas AG increased full-year guidance for 2010 after reporting record first-quarter sales on Tuesday that were buoyed by a turnaround of the Reebok brand and merchandise for June’s FIFA World Cup.
This story first appeared in the May 5, 2010 issue of WWD. Subscribe Today.
“We had a great start to the year, achieving record first-quarter sales driven by growth in all segments,” stated Adidas chief executive officer Herbert Hainer. “Our retail segment, record football [soccer] sales and a strong performance for Adidas and Reebok in North America were some of the main catalysts driving this development.”
The Herzogenaurach, Germany-based brand said revenue in 2010 will rise at a “midsingle-digit” pace, faster than the previous outlook of “low- to midsingle-digit” growth. Gross profit as a proportion of sales will be as much as 47.5 percent, higher than a previous forecast of up to 47 percent.
The company, which reported preliminary results last month, confirmed full-year earnings per share would reach 2.05 euros to 2.30 euros, or $2.74 to $3.08 at current exchange. This compares to the 1.90 euros to 2.15 euros, or $2.55 to $2.88, reported in March.
Adidas posted first-quarter net income attributable to shareholders of 168 million euros, or $232.8 million, for the three-month period ended March 31, versus 5 million euros, or $6.5 million euros, a year ago, when profits fell 97 percent. Company sales gained 4 percent to 2.67 billion euros, or $3.71 billion.
Dollar figures are converted from euros at average exchange for the periods to which they refer.
By category, Adidas grew by 4.2 percent in the quarter bolstered by sales in the soccer category. TaylorMade-Adidas Golf and Reebok increased 14.9 percent and 0.5 percent, respectively.
Adidas, which will outfit 12 teams at the World Cup in South Africa, is “convinced it will achieve over” its 1.3 billion euro, or $1.7 billion, target in sales of soccer-related products this year, Hainer noted.
By region, Western Europe grew 5 percent, thanks to strong sales in Germany and the U.K. North America grew by 1 percent, and Latin America increased 24 percent. Meanwhile, Greater China fell by 20 percent. Retail sales increased by 15 percent while wholesale inched up 1 percent. Sales in other businesses were up 7 percent.