Adidas losses due to Reebok acquisition and World Cup

18 April 2006

Adidas-Salomon AG, the world's second-largest sports goods manufacturers, reported a fourth-quarter loss. This was attributed to the cost of integrating Reebok and also for the costs associated with marketing the World Cup soccer tournament. The net loss was $4.8 million. However, sales rose 27% to e1.52 billion. Adidas, whose $3.8 billion acquisition of Reebok in January doubled their share of the US market and narrowed the gap with larger rival Nike, raised sales with orders tied to the World Cup and demand for products such as the Superstar 35 sneaker in the US. Reebok's sales fell 3% in the quarter after retailers cut orders. Adidas's orders were up 8% at the end of the quarter excluding currency fluctuations. The company said that North American orders were up 17%, while the increase in Adidas's main European business amounted to 3%. Reebok's order book was down 22%, with a 28% drop in the US.

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