adidas today reported a slight rise in Q2 earnings "supported by strong sales in China and Western Europe," but the company noted it could "shed its golf unit," according to Ellen Emmerentze Jervell of the WALL STREET JOURNAL. The company said that net profit rose 1.4%, or $159M year-over-year. Sales rose 5% compared with the same period last year, when adidas "benefited from revenue related to the FIFA World Cup." The company in March "launched a new strategic plan" and adidas Chair & CEO Herbert Hainer "declared a financial resurgence was under way." Hainer this morning said, “We have said all along that our new strategy ‘Creating the New’ will already show first positive results this year. The second quarter is -- without a doubt -- proof positive for that.” Emmerentze Jervell notes a "blow for management" in Q2, however, was the "continued negative performance" of its TaylorMade-adidas Golf unit. Hainer has been "pushing for a recovery in the business, but sluggish demand for golf equipment, inventory overhang and a poorer-than-expected performance of its new products has been a challenge." TaylorMade-adidas Golf’s currency-adjusted sales were down 26%. adidas said that it had "engaged with Guggenheim Partners investment bank to analyze 'future options' for the business, and that it in particular was looking at its Adams and Ashworth brands" (WSJ.com, 8/6). FOOTWEAR NEWS' Sheena Butler-Young noted adidas has been "experiencing slumping sales recently, particularly in North American markets where the firm has been losing share" to Skechers and Under Armour (FOOTWEARNEWS.com, 8/5). CNBC’s Seema Mody said adidas’ earnings report is a "breath of fresh air" as the company is "seeing a jump in greater China sales." Mody: "So many companies this earnings season had been referencing China as a pain point, but they actually see growth in that region despite the volatility we’re seeing in the market as well as in the economy." Mody noted football and basketball "continue to dominate with the younger audience" in the market, which could explain why golf sales are struggling. Mody: "But we'll see what happens because traditionally in America golf is very popular" ("Worldwide Exchange," CNBC, 8/6).
