ADS Adidas AG

--Adidas fourth-quarter net profit rose 54%

--Coronavirus outbreak significantly hit business in Greater China region

--Guidance for this year doesn't include any impact from the coronavirus

By Pietro Lombardi

Adidas AG raised its dividend after a strong increase in fourth-quarter net profit helped boost results for 2019, but it warned that the coronavirus has hit its business in the first quarter and may affect guidance for this year.

Net profit for the quarter rose 54% to 167 million euros ($189.5 million), the German sporting-goods company said Wednesday.

Revenue grew almost 12% to EUR5.84 billion for the quarter.

Profit and revenue also increased for the full year, by 16% and 7.9%, respectively.

Growth across regions boosted the top line last year, the company said, with operating margins also increasing.

However, the coronavirus has significantly affected the company's business in China, it said.

"Following the outbreak of the coronavirus, our business in Greater China has experienced a significant negative impact since Chinese New Year," Chief Executive Kasper Rorsted said.

Due to the closure of many stores and lower traffic in those that remained open, revenue in the Greater China region fell about 80% between late January and the end of February. Since then, the situation has improved slightly, with stores gradually reopening and traffic picking up. The company expects first-quarter revenue in the region to fall by between EUR800 million and EUR1 billion from a year earlier, with operating profit down between EUR400 million and EUR500 million.

The coronavirus may also affect the guidance for this year.

"We cannot yet reliably quantify the magnitude of the overall financial impact in 2020," the CEO said.

For this year, the company expects revenue growth of between 6% and 8% at constant currency. Operating margin is seen increasing to between 11.5% and 11.8%, while the company targets a growth of 10% to 13% in net income from continuing operations. The outlook doesn't include any impact from the coronavirus.

Adidas proposed a 15% increase in the dividend to EUR3.85 a share.

Write to Pietro Lombardi at pietro.lombardi@dowjones.com

(END) Dow Jones Newswires

March 11, 2020 03:53 ET (07:53 GMT)

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