OUTLOOK Adidas Q4 opg seen doubling on Reebok integration, growth at key brand |
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Tue, 06 Mar 2007 11:16
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FRANKFURT (AFX) - Adidas AG is expected to announce that fourth-quarter operating profit (EBIT) has more than doubled, on Wednesday, thanks to last year's acquisition of US peer Reebok and solid growth at its core Adidas brand, analysts said.EBIT in the three months to Dec 31 is seen reaching 71 mln eur, up from 35 mln in the same period a year earlier, according to the average of an AFX News poll of 13 analysts.Sales are expected to grow to 2.210 bln eur from 1.521 bln, boosted by the integration of Reebok.The German sporting goods maker is seen posting a net profit after minorities of 19 mln eur, compared with a net loss of 4 mln the year before.In the fourth quarter 2005, Adidas's bottom line was impacted by one-off costs related to the acquisition of Reebok.Analysts said they will be paying special attention to the performance of the Reebok brand, which has been struggling with declining sales.'We believe a full turnaround of the Reebok brand will be difficult to achieve in both the US and UK markets in the near term,' Susquehanna Financial analysts said in a recent research note.'A full turnaround is not, we believe, likely until the second half of 2007 at the earliest.'In November, Adidas slashed its 2007 earnings guidance because of weak order growth at Reebok. It said 2007 net profit for the whole of Adidas Group was now expected to grow at a rate approaching 15 pct from 2006. The previous guidance was for net profit growth of 20 pct.At the time, Adidas also announced it would raise investment in Reebok by 50 mln eur.newsdesk@afxnews.comshe/jfb/gpCOPYRIGHTCopyright AFX News Limited 2007. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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Adidas buys Reebok distribution rights in Turkey 