Adidas sees second quarter profit skid by 93%

Adidas sees second quarter profit skid by 93%

Berlin: The German sports equipment and clothing group Adidas on Wednesday posted a 93% drop in second quarter profit that swamped other losses in the country’s retail sector, but confirmed its 2009 outlook.

Adidas said that its net profit in the three months from April to June dropped to €9 million ($13 million) from €116 million in the same period one year earlier.

The result was nonetheless better than a forecast loss of €2.2 million by analysts polled by Dow Jones Newswires.

Sales in the quarter fell by 2.5% to €2.46 billion, mainly owing to weak results in Europe.

“Although there are still challenges ahead, I am confident that our results will improve as we go through the remainder of the year," a statement quoted chief executive Herbert Hainer as saying.

The results highlighted a retail downturn associated with the global economic slowdown.

On Monday, German retailer Metro, number three worldwide, reported a 3.8% slump in second quarter sales and said the full year result would depend in large part on developments in weakening jobs markets.

For the first half of 2009, Adidas said net profit fell 95% to €13 million, on sales that lost 2% to €5.034 billion.

It said sales were expected to fall by between 1-5% over the entire year.

One of the world’s biggest makers of sporting goods equipment and clothing, Adidas has grown more pessimistic as consumer spending worldwide decreased owing to rising unemployment and dampened consumer sentiment.

A breakdown of the figures showed that first half sales of both the Adidas and Reebok brands fell by 3% and 2% respectively, but that the TaylorMade-Adidas Golf division turned in an 8% increase.

Hainer said that the group did not see any fundamental deterioration in the business since publishing our first quarter results adding: “As a result, I believe we have seen the bottom in our financial performance this year."