Adidas Q2 profits plunge 93 per cent

German sports equipment and clothing group Adidas yesterday posted a 93 per cent drop in second quarter profit that swamped other losses in the country's retail sector, but confirmed its 2009 outlook.

Adidas said net profit in the three months from April to June dropped to €9 million from €116 million in the same period a year earlier.

The result was nonetheless better than a forecast loss of €2.2 million by analysts polled by Dow Jones Newswires.

Sales in the quarter fell by 2.5 per cent to €2.46 billion, mainly owing to weak results in Europe.

"Although there are still challenges ahead, I am confident that our results will improve as we go through the remainder of the year," a statement quoted chief executive Herbert Hainer as saying.

The results highlighted a retail downturn associated with the global economic slowdown.

On Monday, German retailer Metro, number three worldwide, reported a 3.8 per cent slump in second quarter sales and said the full year result would depend in large part on developments in weakening jobs markets.

For the first half of 2009, Adidas said net profit fell 95 per cent to €13 million, on sales that lost two per cent to €5.034 billion.

It said sales were expected to fall by between one to five per cent over the entire year.

One of the world's biggest makers of sporting goods equipment and clothing, Adidas has grown more pessimistic as consumer spending worldwide decreased owing to rising unemployment and dampened consumer sentiment.

A breakdown of the figures showed that first half sales of both the Adidas and Reebok brands fell by three and two per cent respectively, but that the TaylorMade-Adidas Golf division turned in an eight per cent increase.