Adidas profits stopped in tracks by Reebok writedown
Adidas 2012 net profit slumped 14.2 percent to 526 million euros ($683 million) as a result of a one-off writedown of 256 million euros on its Reebok brand, the German sports gear manufacturer said Thursday.
The goodwill impairment was related to adjusted growth assumption for Reebok in North America, Latina America and Brazil, Adidas said, and pushed the company into the red in the fourth quarter, when it turned in a net loss of 272 million euros.
Excluding the writedowns, the final quarter loss in 2012 amounted to just 7 million euros, and full-year net profit actually grew by 29 percent to 791 million euros, Adidas calculated.
Therefore, Chief Executive Officer Herbert Hainer described 2012 as yet another successful year for the group, in which sales jumped 11.7 percent to 14.8 billion euros.
"Our products and brands were again at the fore, not only being the most visible at the year's major sports events, but also enjoying several important market share victories along the way," Hainer added.
The CEO said he expected sales to increase at a mid-single-digit rate in 2013, with net profit predicted to reach between 890 million and 920 million euros.
Adidas shares were among the biggest gainers on the Frankfurt Stock Exchange on Thursday, climbing more than 3 percent on the news that the company will hike 2012 dividend to 1.35 euros a share - up 35 percent from 2011.