Adidas Claims Top Spot From Nike as Profit Surge
May 9, 2006
The group, locked in a fierce battle for supremacy with US-based Nike, said that net profit had leapt 37.0 percent from the equivalent figure in 2005 to 144 million euros ($185.6 million). Sales in the first quarter totaled 2.459 billion euros, an increase of 47 percent.
"We are clearly market leaders in the biggest markets, therefore it's quite logical that we are the number one," said Adidas chief executive Herbert Hainer during a conference call with journalists.
However, figures from Nike at the end of March showed the US group remains ahead on a financial basis with net profit of $325.8 million, (about 256 million euros), and sales of $3.3 billion for the period of December to February.
The claim from Adidas is a sign of an intensifying battle between the companies ahead of the soccer World Cup 2006, which begins in Germany next month and which is vital for both brands. Adidas is an official sponsor of the competition and is to provide the official match ball as well as kit sponsorship for six of the leading national teams in the competition.
On the basis of a surge in demand for World Cup merchandise, Hainer announced that Adidas expected to sell football equipment valued at 1.2 billion euros this year, rather than the previously expected 1.0 billion euros.
"Demand for this (official) ball and other World Cup products is very big," said Hainer "We've scored on all product categories."
Adidas enthusiastic about Reebock
Commenting on results for the first-quarter, Hainer also pointed to the integration during the period of US brand Reebok, which was acquired by Adidas in January for more than 3.0 billion euros.
"The Adidas Group has got off to a powerful start in the first quarter 2006," said company chief executive Herbert Hainer. "We have made important progress in successfully integrating Reebok within the Adidas Group and are well positioned for the World Cup, which is only a month away."
The group maintained its forecasts for 2006 of growth of at least 10 percent in sales and net profit.
In morning trading on the Frankfurt stock exchange, shares in Adidas gained 2.11 percent to 170.93 euros in a broadly weaker market.
"The figures beat estimates and the outlook has been confirmed," said a Frankfurt-based dealer who asked not to be identified.