By Ellen Emmerentze Jervell
FRANKFURT-- Adidas AG on Thursday reported a significantly wider
fourth-quarter loss, hurt by goodwill impairment losses, negative
currency effects and losses from its discontinued Rockport
unit.
The German sportswear group said its net loss for the three
months to the end of December came in at EUR140 million, compared
with a loss of EUR10 million for same period the year before.
Adidas blamed the loss on higher input costs, negative currency
effects, and goodwill impairment losses of EUR78 million. When
excluding the extraordinary costs related to goodwill impairment,
but including losses related to the sale of Rockport, Adidas
reported a loss of EUR62 million, compared with a profit of GBP42
million a year earlier. The company's fourth-quarter sales rose
6.5% to GBP3.6 billion.
"2014 was a year with ups and downs for the adidas Group. But we
tackled the challenges resolutely and achieved our adjusted top-
and bottom-line targets," Chief Executive Herbert Hainer said in a
statement.
The world's No. 2 sports-gear maker, behind Nike Inc., has been
trying to turn around its once-booming business after suffering
major losses last year. In late July, it admitted it wouldn't be
able to meet its financial goals for 2015 and cut its net profit
target for 2014 from a range of EUR830 million to EUR930 million to
EUR650 million.
Both Reebok and Adidas brands experienced sales growth, up 1%
and 11%, respectively, on a currency neutral basis. Sales at its
TaylorMade-adidas Golf division, which has been struggling lately,
fell 24%.
For the full year, the company reported net profit of EUR490
million, down from EUR787 million last year, on a rise in sales to
EUR14.5 billion. Without goodwill impairment costs, its profit for
2014 was EUR568 million, down from EUR839 million in 2013. Adidas
in January said it had met its much-reduced profit target, a number
that is adjusted for the book loss of EUR82 million related to the
Rockport divestiture. Adidas reported also reported in January that
its group sales had increased 6% in 2014.
Adidas said it expects to increase currency-neutral sales at a
mid-single-digit rate in 2015 and net profit from continuing
operations to increase at a rate of 7% to 10%. The company will
launch its new five-year strategy by the end of this month.
Write to Ellen Emmerentze Jervell at ellen.jervell@wsj.com
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