Adidas Running Hard

Adidas-Salomon AG (Frankfurt, Germany) reaffirmed full year projections of 5% currency-neutral sales growth, a gross margin of 42-43% and earnings growth of between 10 and 15%.

Stronger-than-expected sales and margin development in Europe, the company's largest and most profitable region, and solid sales growth in Asia will be the drivers of this performance, said ceo Herbert Hainer.

The company said its core adidas brand continues to set the pace with strong currency-neutral growth in Asia, Europe and Latin America. Adidas' growth is fueled by the Sport Performance categories running and football as well as continued momentum in the Sport Heritage division.

However, the extremely difficult retail conditions that affected North American sales in the first quarter continued in the second. Backlogs at the end of the quarter (which reflect the order situation for the next six months) indicate a decline of between 10% and 15%. Therefore, adidas-Salomon does not anticipate sales growth in North America for 2003.

“In the coming weeks and months, U.S. consumers will see a number of new athletes, products and measures by adidas which show our intensified efforts in the American market,” said Hainer. “I reconfirm our Group sales and earnings expectations for 2003, which will be driven by strong developments in Europe and Asia.”