adidas-Salomon Q4 Profit Slides 27% on 5.9% Sales Gain…

Based on preliminary figures, adidas-Salomon sales in 2004 increased 3.4% to €6.48 billion ($8.06 bn) from €6.27 billion ($7.10 bn), a 7% improvement in currency-neutral terms. Net income for the Group in 2004 increased by 20.8% to a record €314 million ($390.6 mm), or €6.88 ($8.56) per share, as group margins improved 230 basis points to 47.2% of sales versus 44.9% of sales in 2003. The GM gain was seen primarily as result of “increased adidas own-retail activities, an improving product mix as well as a stronger euro.”

Fourth quarter sales improved 5.9% to €1.43 billion ($1.86 bn) from €1.35 billion ($1.61 bn) in Q4 last year. Earnings declined 26.9% to €19.0 billion ($24.6 mm), or €0.42 per share.

For 2005, adidas-Salomon expects to deliver net income growth between 10% and 15% and grow Group currency-neutral sales in the mid- to high-single digit range.

About The Author

Teresa Hartford

Teresa Hartford Group Publisher & Creative Director | SGB Media teresa@sgbonline.com | 704.651.5741

adidas-Salomon Q4 Profit Slides 27% on 5.9% Sales Gain…

Based on preliminary figures, adidas-Salomon sales in 2004 increased 3.4% to €6.48 billion ($8.06 bn) from €6.27 billion ($7.10 bn), a 7% improvement in currency-neutral terms. Net income for the Group in 2004 increased by 20.8% to a record €314 million ($390.6 mm), or €6.88 ($8.56) per share, as group margins improved 230 basis points to 47.2% of sales versus 44.9% of sales in 2003. The GM gain was seen primarily as result of “increased adidas own-retail activities, an improving product mix as well as a stronger euro.”

Fourth quarter sales improved 5.9% to €1.43 billion ($1.86 bn) from €1.35 billion ($1.61 bn) in Q4 last year. Earnings declined 26.9% to €19.0 billion ($24.6 mm), or €0.42 per share.

For 2005, adidas-Salomon expects to deliver net income growth between 10% and 15% and grow currency-neutral sales in mid- to high-single digits.

>>> Did the company lose steam at the end of the year, or did the fourth quarter get pulled into Q3? Stay tuned for the full report…

About The Author

Teresa Hartford

Teresa Hartford Group Publisher & Creative Director | SGB Media teresa@sgbonline.com | 704.651.5741

adidas-Salomon Q4 Profit Slides 27% on 5.9% Sales Gain

Based on preliminary figures, adidas-Salomon sales in 2004 reached €6.478 billion ($8.06 bn), a 7% improvement in currency-neutral terms. In euros, sales increased 3.4% to €6.267 billion ($7.10 bn). Currency-neutral sales increased for all brands and in all regions.

Group gross margin increased 2.3 percentage points to 47.2% in 2004 from 44.9% in 2003, a record level that reflects the impact of increased adidas own-retail activities, an improving product mix as well as a stronger euro.

Operating expenses in 2004 grew 6.6% to €2.478 billion(3.08 bn) versus €2.324 billion ($2.63 bn) in 2003. Group operating profit increased 18% to €580 million ($721.4 mm) versus €490 million ($554.7 mm) in 2003 and operating margin grew 110 basis points to 9.0% in 2004 from 7.8% in 2003. As a result, income before taxes grew 19% to €520 million ($646.8 mm), compared to €438 million ($495.9 mm)in the prior year. This performance was driven by higher sales and strong gross margin improvement.

Net income for the Group in 2004 increased by 20.8% to a record €314 million ($390.6 mm) from €260 million ($294.3 mm) in 2003, representing basic earnings per share of €6.88 ($8.56) versus €5.72 ($6.48) in 2003. The earnings growth is twice as high as the initial guidance at the beginning of the fiscal year.

adidas-Salomon CEO Herbert Hainer commented, “Our excellent 2004 performance underlines our Group’s ability to deliver significant operating margin improvements. Our record earnings were driven by currency-neutral sales increases at all our brands and in all our regions as well as strong gross margin expansion. 2005 will be another exciting and successful year for adidas-Salomon. We plan to grow Group sales at mid- to high-single digit rates on a currency-neutral basis and deliver net income growth of between 10 and 15%.”

About The Author

Archives

Categories

Pin It on Pinterest

Share This