Adidas ups outlook, announces India probe

Apr 30, 2012 |

Reuters

Frankfurt

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Germany's Adidas raised its outlook for 2012 driven by better than expected sales in China and Japan in the first-quarter even as it announced probe into charges related to 'commercial irregularities' at its Reebok unit in India, it said on Monday.

Adidas said it had already replaced its management at Reebok India and the situation could result in a pretax impact of up to 125 million euros, while further restructuring there could cost up to 70 million euros in 2012.

"The situation in India, although unfortunate, will allow us to now accelerate plans to improve a specific under performing part of our business," Chief Executive Herbert Hainer said in a statement.

Adidas also said it now expects sales to rise in 2012 by nearly 10 per cent, up from a previous forecast of 5-9 per cent, while net earnings would grow by between 12 and 17 per cent, compared to previous guidance of 10-15 per cent.

The new outlook includes any charges related to Reebok India, it said.

The group, which will release its full first-quarter report on Thursday, reported first-quarter sales of 3.8 billion euros, operating profit of 409 million and net income of 289 million.

Analysts had been expecting Adidas to report sales of 3.59 billion euros, operating profit of 332 million and net income of 232 million, according to Thomson Reuters I/B/E/S.

Last week, smaller rival Puma said its first quarter results had been hurt by caution among shoppers in Europe.

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