Adidas cuts 2012 sales forecast on Reebok woes

Adidas said it now expected its 2012 sales to rise by a high single-digit per cent, compared with a previous forecast for a 10% rise

German group Adidas has trimmed its 2012 sales forecast amid a continuing sales slump at Reebok, whose sales have fallen sharply for a second quarter.

The world’s second-largest sportswear group after US rival Nike said on Thursday it now expected 2012 sales to rise by a high single-digit percent, compared with a previous forecast for a rise of almost 10 per cent.

Adidas also reported third-quarter operating profit of Euro 494 million ($630 million) and sales up four per cent to Euro 4.17 billion, in line with expectations for Euro 490 million and Euro 4.16 billion. Reebok has had a torrid year in which its toning shoes fell out of favour, it discovered fraud at an Indian unit, and lost a major American football contract. In addition, the group is now being hurt by a lockout by US hockey players threatening to wipe out the entire season. Adidas has annual sales of around Euro 100 million from hockey in North America. Adidas has performed better than rivals Nike and Puma this year, taking market share in hotly contested countries such as China.

Adidas sees India Reebok sales halving
Adidas expects its sales and customer base in India will halve once it has completed restructuring the business after a fraud was uncovered there earlier this year. “Revenues can even be less than half as we want to take only customers where we can build a healthy sustainable business,” Chief Executive Herbert Hainer said on Thursday.

CFO Robin Stalker said Adidas had taken one-off charges of around Euro 60 million ($76.5 million) related to the restructuring by the end of September with a further 10-15 million to follow in the fourth quarter.

They were speaking after Adidas slightly lowered its 2012 sales outlook earlier on Thursday on lower-than-expected sales at Reebok.