• Q4 net profit of EUR42m
  • Gross margin at 46.5%
  • Net sales grow 3.3%
Adidas sales grew in all regions, channels and brands

Adidas sales grew in all regions, channels and brands

Sporting goods giant Adidas saw its shares dip this morning (5 March) after it warned its 2014 results would be significantly impacted by currency movements.

Adidas today revealed it had moved to a profit in the fourth quarter, earning EUR42m (US$57.6m) versus a net loss of EUR7m a year earlier. Gross margin in the three month period narrowed slightly to 47.5% from 47.6% last year due to negative effects resulting from a less favourable hedging rate.

Fourth-quarter sales rose 3.3% to EUR3.48bn, while comparable store sales were up 3%.

Sales grew in all regions, channels and brands. In emerging European markets, currency-neutral sales were up 11%, while in North American sales increased 14% and in China sales grew 8%.

For fiscal 2014, however, Adidas said it expects group results to be hit significantly by weakening emerging market currencies from Russia and Argentina. This despite sales being helped by major sporting events such as the football World Cup, for which Adidas is the Official Partner.

The company expects currency-neutral group sales to increase at a high-single-digit rate and net income to be between EUR830m and EUR930m. The latter falls short of Bloomberg analyst estimates of EUR1bn.

Operating margin is expected to be at a level of between 8.5% and 9%.

Cantor Fitzgerald analyst Allegra Perry said fourth-quarter earnings were around 13% ahead of consensus estimates. However, comment on the group's outlook, she added: "This now means that in order for Adidas to meet the Route 2015 operating margin target of 11%, the group will need to improve profitability by 250-300bps in FY15E which in our view, even considering likely substantial FX hedging gains that year, will be highly challenging."

Shares were down 0.78% at EUR82.86 at 08:50am GMT today.

Adidas yesterday extended the contact of its chief executive officer Herbert Hainer by two years until 2017.