Adidas takes downturn in its stride

German sportswear giant adidas has seen fourth quarter net profit jump 151 per cent on improved sales, a better tax rate and higher operating profits.

Herzogenaurach-based adidas, the world's second largest sportswear company by sales after Nike, said net profit in the fourth quarter increased to 54 million ($135.38 million) from 21 million in the October through December period a year earlier.

Sales for the quarter rose 6 per cent to 2.57 billion from 2.42 billion the previous year.

For the full year 2008, adidas said net profit increased 16 per cent to 642 million from 551 million a year ago. Sales in 2008 rose 5 per cent to 10.8 billion from 10.3 billion a year before.

The company said the adidas brand and the TaylorMade golf segment contributed to the year's sales, while the Reebok brand saw revenues decrease compared with 2007. Sales in constant euro terms increased 10 per cent for the adidas brand and 1 per cent for TaylorMade. Reebok saw an 8 per cent decline in sales in 2008.

But the company warned this year would be difficult. "Expectations for the development of the global economy and its impact on the sporting goods industry in 2009 are subject to a high degree of uncertainty," it said.

"Consequently, the effect global macroeconomic developments could have on the adidas group's business outlook is difficult to forecast."

Latin America posted the strongest growth in 2008 with a 36 per cent yearly increase in sales, to 893 million. Asia saw an 18 per cent increase in sales to 2.7 billion and Europe recorded a 7 per cent rise to 4.7 billion. Sales in North America were weaker, falling 14 per cent in 2008 to 2.5 billion.

- AP