Off the ball Adidas suffers 93% profits slump

Published on Wednesday 5 August 2009 21:43

ADIDAS, the world's second– largest sportswear maker, yesterday claimed to have turned the corner after reporting better-than-expected second-quarter results, sending shares up nearly 6 per cent.

The German company said net profit dropped by 93 per cent to 9 million (7.6m) from 116m in the second quarter of 2008, as sales dipped 3 per cent to 2.46 billion from 2.52bn.

As well as the sales decline, Adidas, which owns the Reebok brand, blamed currency devaluations – the Russian ruble in particular – and the "highly promotional retail environment". Operating profit for the second quarter slid 66 per cent to 72m.

Chief executive Herbert Hainer said: "Although there are still challenges ahead, I am confident that our results will improve as we go through the remainder of the year.

"I believe we have seen the bottom in our financial performance this year."

Hainer said Adidas expects a lift in sales starting toward the end of the year thanks to the 2010 World Cup in South Africa.

In 2006, when the tournament was hosted by Germany, Adidas sold more than 1bn worth of football-related merchandise as fans snapped up boots, shirts and accessories such as the official ball.