German sports goods giant Adidas AG (ADDDF.PK, ADDYY.PK) Thursday reported a loss for the fourth quarter, compared with a profit last year, weighed down by goodwill impairment charges and higher expenses, though there has been a modest growth in sales. The company, which hiked its dividend by 35 percent, expects higher sales and adjusted earnings in 2013.
For the fourth quarter, net loss attributable to shareholders totaled 272 million euros ($353.31 million) compared to a profit of 3 million euros last year. The latest results included goodwill impairment losses of 265 million euros. The prior-year results have been restated owing to irregularities discovered at Reebok India Co.
Excluding goodwill impairment, the latest quarterly loss was 7 million euros.
Net sales in the quarter grew 4 percent to 3.369 billion euros from 3.241 billion euros in the prior year. Sales were up 1 percent when the currency impact is excluded.
Sales slid 0.8 percent in the Wholesale business to 2.063 billion euros and were down 3.6 percent on a currency-neutral basis.
Retail sales increased 13.4 percent to 882 million euros and improved 9.2 percent when currency impact is not accounted.
Western Europe and North America saw sales dropping 2.2 percent and 3.4 percent, respectively. Sales in North America benefited from NFL licence sales last year.
However, European Emerging Markets increased sales by 13 percent and Greater China sales climbed 19.4 percent as a result of strong double-digit sales gains at adidas Sport Style. Other Asian Markets and Latin America also saw sales growth.
Adidas brand increased sales by 5.7 percent to 2.535 billion euros and TaylorMade-adidas Golf sales increased 18.3 percent to 273 million euros. Reebok sales fell 9.4 percent to 428 million euros.
Further, Adidas announced a 35 percent higher dividend of 1.35 euros per share.
For the full year 2012, the company reported earnings of 3.78 euros per share excluding goodwill impairment losses. Net sales totaled 14.883 billion euros in 2012.
Looking ahead, the company sees earnings per share to increase in the range of 4.25 to 4.40 euros per share, excluding goodwill impairment, and expects group sales to increase at a mid-single-digit rate.
Operating margin is estimated to improve to a level approaching 9.0 percent, compared to 8.0 percent in 2012, which excludes goodwill impairment losses.
The stock closed at 71.67 euros on Wednesday.
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