Adidas, German maker of sportswear and equipment, today said that its earnings were down in the first quarter, hit by unfavourable exchange rates and the strong euro.
“Our financial results for the first quarter reflect the challenging start to 2014 which we had expected,” chief executive Herbert Hainer said.
“Strong performances particularly in the emerging markets and in our own retail were masked by strategic changes to how we go to market at Taylor Made-Adidas golf as well as adverse currency effects,” Hainer said.
“Looking in depth through our results, however, there are many positive underlying trends. Therefore, we can look forward to an accelerated period of growth and momentum for our group for the remainder of 2014.”
In the period from January to March, the net profit fell 33.8 per cent to €204 million. Underlying or operating profit tumbled 31.4 per cent to €303 million and sales were down 5.8 per cent at €3.533 billion.
“While we still have to be wary of currencies and their effects on our financials, I expect a strong second quarter to point the way forward to a sustained period of growth and momentum for our group,” Hainer said.
In concrete terms, group sales were projected to rise “at a high single-digit rate on a currency-neutral basis in 2014,” Adidas said.
In particular, this year’s major sporting event, notably the FIFA World Cup in Brazil, would provide positive stimulus to sales.
“Group sales development will also be favourably impacted by our high exposure to fast-growing emerging markets as well as the further expansion of retail,” the statement said.
At the same time, currency effects were expected to have a “significant negative impact on the group’s top-line development in euro terms.”
As a result, full-year net profit would come out at €830-930 million compared with €839 million in 2013, the group said.