adidas sees profits increasing by 5%-10% in 2002
The world's second-largest sportswear and equipment brand, adidas-Salomon, said today it expected sales to grow by at least 5% in 2002 and profits by between 5% and 10%.
The forecast was made as the Herzogenaurach, Germany-based company released its full year and fourth quarter results for 2001 – a year in which sales rose to Eur6.1 billion and profits topped Eur208 million. Footwear sales, which account for 44% of group turnover, posted a healthy 5% gain with sales of $2.7 billion. Sales of apparel meanwhile rose 2% to reach Eur2.2 billion. This increase was led by improvements in technical apparel within the group’s ‘Forever Sport’ division.
The company’s order backlog at the end of 2001 was up 4% on the previous year. In Asia, backlogs climbed 18% in constant currency terms while in North America they increased by 3%. Orders fell by 2% in Europe, reflecting a generally more conservative retail purchasing environment.
Fourth quarter net sales were stable at Eur1.4 billion, equivalent to a 5% rise in currency neutral terms, while margins at the group, which buys most of its goods in dollars but sells mainly in euros, were squeezed by weakness in the European currency. Gross margins fell 1.4% points to 41.6% leaving a 4% rise in operating profit to Eur55 million.
Asia was the fastest-growing region for the group in 2001. Net sales grew 15% in the region to reach a record Eur1 billion for the full year versus Eur875 million in 2000, with big increases coming from adidas Japan, signalling increased momentum associated with this year’s World Cup. In Europe, sales gained 7% to reach Eur3.1 billion, compared to $2.9 billion in 2000, led by double-digit increases in footwear sales. By contrast, sales in North America declined 5% to Eur1.8 billion versus Eur1.9billion the previous year.
The company said it expected its 2002 US sales to be driven by footwear – and in particular the company’s new Clima Cool and a3 footwear lines, which are both due for launch this quarter. Combined with a renewed focus on speciality retail stores, this would lead to double-digit sales growth in North America, adidas Chief Executive Herbert Hainer said.
