By Ellen Emmerentze Jervell
FRANKFURT--Adidas AG (ADS.XE) said Thursday its net profit for
the third quarter fell 11% due to negative currency effects, a
continuing slide in sales in its golf division and increased
marketing costs.
The world's No. 2 sports-gear maker said net profit for the
quarter ended September fell 11% to EUR282 million ($352.1 million)
from EUR316 million a year earlier. Sales rose 6.2% to EUR4.1
billion from EUR3.9 billion in the same quarter last year. Adidas
blamed the profit decline on continuing weakness of emerging-market
currencies compared with the euro--in particular the Russian
ruble--and discounting and restructuring at TaylorMade-Adidas Golf.
Adjusted for currency fluctuations, sales increased 9%.
"We have been aggressively addressing our key challenges:
restructuring and stabilizing TaylorMade Adidas Golf, adjusting our
business in Russia/CIS and intensifying our efforts to revive
momentum and growth in the U.S.," Chief Executive Herbert Hainer
said in a statement.
Sales at its TaylorMade-Adidas Golf division fell 34% in the
third-quarter. The golf business, which has been struggling due to
a stagnating market, was one of the reasons behind Adidas's August
profit warning, and the company said it would continue to focus on
clearing inventory in the division.
Political instability in Russia, usually is one of Adidas's most
profitable regions, also ate into the retailer's margin contributed
to August's profit warning. But Adidas said it is confident it will
meet its reduced targets.
For the full year, it expects net profit to be EUR650
million.
Write to Ellen Emmerentze Jervell at
ellen.jervell@dowjones.com
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