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Nov 4, 2009
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Adidas says cautiously optimistic for 2010

By
Reuters
Published
Nov 4, 2009

FRANKFURT, Nov 4 (Reuters) - German sports goods maker Adidas AG (ADSG.DE) gave a warily upbeat outlook for 2010 on Wednesday 4 November after its third-quarter operating profit declined by almost a third, in line with analysts estimates.


Adidas Climacool

"Consumer and retailer sentiment still hovers between fear and optimism. However, we are well prepared to face any challenges thrown our way and I am cautiously optimistic," Chief Executive Herbert Hainer said in a statement.

"With a firm grip on inventories, a better financial position and a leaner organisation, we turn into the 2010 event year with innovative products, exciting concepts and clear focus on the tasks at hand," he added.

The world's second-largest sports good maker after Nike (NKE.N) said it still expects 2009 group margins, net income and earnings per share to decline due to higher operating costs and sees group sales down by a mid-single-digit rate.

Adidas and its rivals Nike and Puma (PUMG.DE), have been battling dwindling sales across the world as cash-strapped consumers reduce discretionary spending.

The Herzogenaurach-based company has countered declines in consumer spending mainly by cutting costs and streamlining operations while keeping marketing spending stable.

Its third-quarter operating profit fell 29 percent to 336 million euros ($491.6 million) on sales of 2.89 billion euros.

Both figures were broadly in line with the average estimate in a Reuters poll of analysts.

Adidas shares trade at 13.8 times 12-month forward earnings, at a discount to Nike, which trades at a multiple of about 16, as investors remain wary of Reebok's weak performance.

Puma is due to report third-quarter results on Monday 9 November. (Reporting by Eva Kuehnen, Editing by Michael Shields)

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