German sports goods giant Adidas AG (ADDYY.PK,ADDDF.PK) Thursday said third-quarter profit declined from the prior year, amid weakness in its golf business. Looking ahead, the company maintained its full year forecast. The stock gained over 4 percent in early trade.
Net income attributable to shareholders fell to 282 million euros ($352.8 million) from 316 million euros a year before.
Net sales grew 6.2 percent to 4.12 billion euros from 3.88 billion euros.
During the quarter, revenues advanced 9 percent on a currency-neutral basis, driven by a double-digit sales increase in Retail and a high-single-digit revenue growth in Wholesale. All regions, except North America, contributed to the currency-neutral revenue growth.
Sales at adidas increased 12 percent, on a currency-neutral basis, driven by double-digit sales growth in the Sport Performance football and running categories, as well as at adidas Originals & Sport Style.
Sales at Reebok grew 7 percent on a currency-neutral basis, driven by sales momentum in the fitness training, walking and fitness running categories.
Meanwhile, revenues in the TaylorMade-adidas Golf segment declined 36 percent on a currency-neutral basis, amid continued weakness in the golf market.
The group's gross margin decreased 1.9 percentage points to 47.4 percent, mainly due to higher input costs as well as negative currency effects. The company noted that increased clearance activities, especially in Russia/CIS, also contributed to the gross margin decline.
Looking ahead, net income attributable to shareholders is expected to be at a level of around 650 million euros for 2014. This is compared to last year's, excluding goodwill impairment losses, of 839 million euros. This represents basic earnings per share of around 3.10 euros.
The company said group sales are likely to increase at a mid to high-single-digit rate on a currency-neutral basis in 2014. Particularly, the adidas brand is expected to benefit from the 2014 FIFA World Cup, where the firm sees record sales of 2 billion euros in the football category.
In 2015, Group sales are forecast to grow at a mid-single-digit rate, while net income would grow at a higher rate than Group sales.
The stock added 4.1 percent in early trade at 59.10 euros.
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