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Adidas posts last year net profit topping $800 million

05 March 2009 10:42 (UTC +04:00)

Bakuâ€“ APA-Economics. German sports equipment and clothing maker Adidas posted on Wednesday a 2008 profit that surpassed its target, but warned business would be tougher this year, AFP reported.
Adidas made a net profit of 642 million euros (800 million dollars), an increase of 16 percent from the previous year and better than its goal of a 15 percent rise.
Analysts polled by Dow Jones Newswires had also forecast a more modest profit of 635 million euros.
The group benefited from the Olympic games in Beijing, and the European football championships, where it sponsored finalists Germany and Spain.
In the fourth quarter of the year, profit more than doubled to 54 million euros owing to a lower tax rate, the company said in a statement.
The strong results came mainly from the group’s Adidas line, while earnings at its Reebok and TaylorMade-adidas golf divisions declined.
The troubled Reebok unit managed to clear away some of its backlog but "as a result of higher clearance sales at lower margins," the group acknowledged.
Unfavourable foreign exchange rates also hampered earnings, it said.
Overall sales gained 4.9 percent to 10.8 billion euros, the statement said, and management will propose an unchanged dividend of 0.50 euros per share.
Lower earnings were foreseen this year however, the company warned.
No major sporting event that could help boost sales is planned in 2009, and business prospects were "difficult to forecast, especially with regard to the second half of the year," the statement said.
Group sales and earnings were both expected to decline between one and five percent, after allowing for changes in foreign exchange rates.
Meanwhile, cost-cutting measures were "already in full swing," including a reduction in travel costs and external consultant fees, the Adidas boss said.
Shares in the group leapt by 3.93 percent to 23.80 euros in midday trading on the Frankfurt stock exchange, while the DAX index of German blue-chips was 2.73 percent higher overall.
Dow Jones Newswires quoted a trader as saying that Adidas shares had fallen before the results were released but that investers had then begun to buy them back.