Adidas keeps stripes through cost cuts
5:00AM
Thursday May 08, 2008
FRANKFURT - Adidas lifted profit by nearly a third with the help of cost cutting and despite another weak quarter for its Reebok brand in the United States, boosting its share price.
The world's second biggest sports goods maker's first-quarter net income jumped 32 per cent to ??169 million ($332 million) and sales rose 3 per cent to ??2.621 billion.
Analysts had forecast average net income of ??157 million euros and sales of ??2.624 billion.
Shares were up 6.2 per cent at ??42.92. The adidas brand order backlog - a key indicator of future sales for retailers - was up 13 per cent at the end of the quarter, thanks to demand ahead of the Beijing Olympics and the Euro 2008 soccer championships.
But Reebok's order backlog was down 13 per cent year on year. It had been down 8 per cent at the end of 2007. Adidas bought Reebok in 2006.
A crisis at US sports retailer Footlocker has hurt sports retailers such as adidas, Puma and Nike. In the fourth quarter of last year, Footlocker shut stores, cancelled existing orders and issued no new orders.
Adidas chief executive Herbert Hainer said protests against Chinese rule in Tibet that have disrupted the international Olympic torch relay and led to calls to boycott the August Beijing Games have had no negative impact on business.
Adidas, a sponsor of the Olympics, "is conscious of the exceptional importance of the protection of human rights", it has said.
"Sponsors, however, should not be expected to solve political issues. We clearly see the limits of our influence."
- REUTERS
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