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Adidas AG (ADS.XE) Wednesday maintained its outlook for sales and earnings growth in 2012 as the sportswear and sports equipment maker reported higher profit and said it was gearing up for higher demand due to the UEFA European soccer championships and the Olympic games.
"Despite the high degree of uncertainty regarding the global economic outlook and consumer spending, sales development will be favourably impacted by the group's high exposure to fast-growing emerging markets," the company said, adding this year's major sporting events will provide a boost to sales.
The world's second-largest sporting goods maker by sales after Nike Inc. (NKE) maintained its expectation for 2012 sales growth at a mid- to high-single-digit rate on a currency-neutral basis, and 2012 earnings per share to increase, within a range of EUR3.52 to EUR3.68.
Net profit in the three months to Dec. 31 more than doubled on the year to EUR18 million from EUR7 million the year before, falling short however of the EUR19 million forecast in a Dow Jones Newswires poll of 10 analysts. Sales rose 11% on the year to EUR3.26 billion, ahead of the EUR3.14 billion forecast, boosted by growth in North America and Greater China.
The company's gross margin fell in the final quarter of 2011 to 45.6% from 46.5% a year earlier, which Adidas attributed to a significant increase in input costs. In 2012, it expects the gross margin to remain at the full-year level of around 47.5%, though increasing input and labor costs are expected in the first half of 2012.
Nike's gross margin also dropped in its fiscal second quarter ended Nov. 30, to 42.7% from 45.3%, mostly due to higher product costs. Peer Puma SE (PUM.XE) said its fourth-quarter gross margin increased to 46.7% on the year from 45.4%, which it attributed to better product mix and price increases.
The company proposed a dividend of EUR1 a share, up from EUR0.80 in 2010.
Adidas shares closed Tuesday at EUR57.73, valuing the company at EUR12.08 billion. Over the past 12 months, the shares have gained about 27% in value, outperforming a 6% rise in the Euro Stoxx Consumer Goods index.
-By Harriet Torry, Dow Jones Newswires; +49 69 29725 511; firstname.lastname@example.org