ADIDAS EARNINGS OFF 12.9%
Byline: Jennifer Weitzman
NEW YORK — Hurt by a weaker euro and softening sales in North America, Adidas-Salomon AG said first-quarter income dropped 12.9 percent.
The German footwear and apparel brand said net income reached $47.3 million, down from $54.4 million. Sales advanced 9 percent, to $1.4 billion, from $1.2 billion. Figures are converted from the euro at current exchange rates.
Overall apparel sales gained 2 percent to $509.3 million, footwear sales gained 7.4 percent to $636.3 million and hardware-other sales gained 39.8 percent to $212.1 million.
By region, Asia continued to deliver the highest growth rates, rising 37 percent to $164 million. Europe rose 8.4 percent to $730 million and Latin America was up 18.1 percent to $30 million. North American sales were virtually even with last year’s at $426 million.
Sales under the Adidas label climbed 4 percent to $1.2 billion, with apparel ahead 2 percent and footwear up 6 percent. There was above-average growth in basketball, soccer, adventure and alternative sports footwear.
Backlog for the Adidas brand at March’s close were up 1 percent as gains of 22 percent in Asia and 8 percent in Europe offset a 13 percent decline in North America.
The bottom line was hurt by the strengthening of the dollar against the euro, as well as an increased tax rate and higher minority interest. Adidas said it took additional charges for its growth and efficiency programs. In January, Adidas announced those programs to help get back onto a steeper growth track. The program includes plans to reorganize management structures to create faster decision making and improved presence on the Internet.
Among other brands, Salomon sales grew 22 percent to $87.4 million, with growth from winter and summer products, particularly hiking and outdoor footwear. Taylor Made golf sales grew 58 percent to $111.5 million.
Looking ahead, Adidas said it still expected consolidated sales would increase only moderately, by about 2 percent, noting, however, that the strength of the U.S. dollar might make this forecast appear conservative.