Adidas, the world's second-largest sports goods maker after Nike, said it has left the worst behind after it reported better-than-expected second-quarter results today and kept its 2009 outlook.
Adidas, which equips the national soccer teams of Germany, Argentina and Spain, said it still expects 2009 margins, net income and earnings per share to decline due to higher operating costs and sees sales down by as much as mid-single-digit rates.
"I believe we have seen the bottom in our financial performance this year," said chief executive Herbert Hainer.
"Although there are still challenges ahead, I am confident that our results will improve as we go through the remainder of the year," he added in a statement today.
Adidas posted a 65.5 per cent drop in second-quarter operating profit to €72 million, beating the average estimate of €39 million in a poll of analysts.
Sales fell 2.5 per cent to €2.5 billion, also above estimates.
A triple whammy of less inventory purchased by retailers, currency fluctuations and spending-averse customers around the world has hit all major sports footwear brands, which are responding by cutting costs.
Adidas aims to save more than €100 million from 2010 by cutting 1,000 of its almost 39,000 staff this year and by closing regional offices and potentially some of its stores.
That is a discount to Nike, which trades at a multiple of about 16, as investors remain wary of weak performance at Adidas's US brand Reebok.
Reuters