Adidas Misses Forecasts as Reebok Remains Weak

Adidas's fourth-quarter net income rose sharply but was below analysts' expectations after sales at its Reebok brand fell and North America remained weak.

AP Adidas

Adidas, the world's No. 2 sports goods maker after Nike , said Adidas-brand order backlog -- a key indicator of future sales for retailers -- was up 17 percent on a currency adjusted basis at the end of 2007, thanks to the 2008 European soccer championship and Beijing Olympics.

But Reebok's order backlog was down 8 percent, Adidas said in a statement on Wednesday.

Adidas, based in Herzogenaurach, bought Reebok in 2006 to complement its strength in classic sportswear such as soccer boots and to compete against Nike. It has since been trying to integrate the company.

Adidas said on Wednesday it had appointed Uli Becker as president and chief executive of Reebok, effective April 1.

Becker replaces Paul Harrington, who was at Reebok for 12 years.

Adidas, known for its three stripes logo, said net income attributable to shareholders was 21 million euros ($32 million), up 63 percent, for the quarter ended December.

Analysts had on average forecast net income of 25 million euros in a Reuters poll.

Sales rose 7.6 percent to 2.42 billion euros, above the average analyst forecast of 2.36 billion euros.

The company reiterated that it expects net income to rise at least 15 percent in 2008 and sales to grow by a high single-digit percentage.

Chief Executive Herbert Hainer said the company was positioned to achieve record results in 2008 and beyond despite "conditions that got tougher in some important markets" in 2007.

Adidas said it had bought back 2.1 million shares as of March 4 under a plan announced in January to buy back 5 percent, or about 10.2 million of its outstanding stock.

Rival Puma said last month that future orders were up 10 percent on a currency-adjusted basis but that U.S. business remained weak.

During the fourth quarter, a crisis at U.S. sports shoes retailer Footlocker hurt sports retailers such as Nike, Puma and Adidas. Footlocker shut stores, cancelled existing orders and issued no new orders.

Adidas shares gained 0.3 percent.

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