Adidas AG said it hired a bank to analyze options for its flagging golf business as the TaylorMade unit’s declining revenue held back second-quarter profit, raising the likelihood of a sale.
Second-quarter net income adjusted for some items rose 1.7 percent 146 million euros ($159 million), the company said Thursday. Analysts expected 148 million euros. Adidas cut its forecast for the golf unit’s sales this year after revenue dropped 26 percent excluding currency shifts in the period.Chief Executive Officer Herbert Hainer is divesting units to streamline Adidas’s business and concentrate on shoes for running, soccer and other sports. In August he sold the Rockport walking shoe unit. Now golf, a business Adidas entered in 1997 with its acquisition of France’s Salomon SA, may be on the block.Golf is waning in popularity in the U.S. and Adidas now forecasts the golf business will have lower sales this year excluding currency shifts. The company previously expected “significantly improved top-line development” for the unit, which accounted for 913 million euros in sales last year, 6.2 percent of Adidas’s total. The shoemaker said it’s studying options in particular for the Adams and Ashworth brands.The stock gained 1.1 percent to 75.29 euros as of 9:19 a.m. in Frankfurt.
In March, Adidas unveiled a strategy to spur growth by paring its product line, shipping new sneakers faster and spending mostly in six taste-making cities including London, New York, Paris and Shanghai where sales are concentrated. Wednesday Adidas said it bought Runtastic GmbH, an Austrian maker of mobile apps for athletes, for an enterprise value of 220 million euros.The company is pouring money into marketing and pushing products to market faster under a plan intended to close a sales gap with Nike Inc., which has widened its lead over Adidas in the U.S. sports-gear market in recent years.The German maker of Lionel Messi soccer cleats took a goodwill impairment of 18 million euros to write down its Latin American and Russian operations.