Adidas Q4 net income falls 64 pct to $26M

[March 03, 2010]  FRANKFURT (AP) -- German sportswear company Adidas AG said Wednesday its fourth quarter net income declined 64 percent to euro19 million ($26 million) on rising purchasing costs, currency effects and a drop in demand during the downturn.

The Herzogenaurach-based company earned euro54 million in net income during the October-December period of 2008.

Revenue for the fourth quarter of 2009 was steady around euro2.5 billion.

For the whole of 2009, net income fell 62 percent to euro245 million from euro642 million. Revenue in 2009 fell 6 percent to euro10.4 billion from euro10.8 billion.

Adidas, the world's second largest sportswear company by sales after Nike Inc., said rising purchasing costs and currency effects were the main reasons for the decline in net income.

"With no doubt, 2009 was the most difficult year during my time as chief executive," Herbert Hainer said in the report.

"However, we rose to the challenge. Despite a 53 percent decline in operating profit, we generated a 141 percent increase in net cash from operations for a record euro1.2 billion. This is definitely the outstanding achievement of the year and a credit to all the hard work and dedication of our employees," Hainer said.

Hainer said Adidas was starting the new year with growing optimism and aiming for a sales increase, partly pushed by this year's football World Cup in South Africa.

During the last World Cup in 2006, hosted by Germany, Adidas was able to add more than euro1 billion to its top line, through sales of football equipment like jerseys, cleats and balls, as fans snatched up garb during the monthlong tournament.

Despite the expected sales kick from the event, the company said it expected a slow turnaround in consumer spending in 2010 and only a low to mid-single-digit increase in sales. However, the company forecast some lower operating and interest rate expenses, which should push earnings per share to a level between euro1.90 and euro2.15 from euro1.22 in 2008.

Adidas' brands include TaylorMade-adidas Golf, Rockport and Reebok-CCM Hockey.

The news sent shares of Adidas 5 percent lower to euro36.12 in Frankfurt morning trade.

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On the Net:

http://www.adidas.com/

[Associated Press; By GEORGE FREY]

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