Adidas' '08 Net Profit Up 1.3%, But Economy May Slow '09 Growth

Hainer Says State Of World Economy May Present A Challenge For Adidas In '09

adidas Thursday reported that its Q3 net profit rose 1.3% and "confirmed its outlook for 2008 but retracted its 2009 guidance based on 'uncertain' economic conditions," according to Allison Connolly of DOW JONES NEWSWIRES. adidas' net profit rose to $390.1M, "beating analysts' expectations for no change." Revenue for the three months ended September 30 grew 4.8% to $3.93B from $3.75B a year earlier. However, adidas said it retracted its outlook for 2009, "as a result of the uncertain global macroeconomic environment." adidas Chair & CEO Herbert Hainer in a statement said, "We are on a good path to reaching all of our financial targets for 2008. However, the current state of the world economy means we have challenges in front of us that require all our energy and focus." Connolly notes "gross margin for the quarter grew slightly to 49% compared with 48.6% during the same period a year earlier." However, operating margin "declined to 15.3% compared with 16% in the prior year due to higher operating expenses as a percentage of sales." Operating profit rose to $602.3M from $600M a year earlier, "above analysts' expectations" of $597.2M (DOW JONES NEWSWIRES, 11/7). 

OTHER BRANDS: adidas said that its brand order backlog as of the end of September was up 4%, but soccer backlogs were "negatively impacted as demand after the Euro 2008 soccer championship eased." Meanwhile, order backlog at adidas' Reebok unit "fell 13[%] as of end-September." Hainer: "We are clearly disappointed with (Reebok's) current performance and acknowledge there is still a long road ahead of us to visibly improve the situation." But Hainer said that he was "confident the challenges Reebok was facing would mainly be resolved by March next year" (REUTERS, 11/6). TaylorMade-adidas Golf Thursday reported $789M in net sales for Q3. That is a 1% increase over the $783M recorded in the same period a year ago (PGA.com, 11/7). adidas' sales were led by a 15% sales growth in the adidas brand and 12% in the TaylorMade golf brand (BIZJOURNALS.com, 11/6).