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Outdoor financials: Adidas 1Q revenue, profit up; plus Garmin, Globalstar and Outdoor Channel

Adidas saw higher first-quarter 2011 revenue and profit, and raised its guidance. Garmin reported strong earnings, but its outdoor sector lagged. Plus first-quarter earnings from Globalstar and Outdoor Channel.

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Adidas Group reported higher revenue and profit for the first quarter and increased its guidance moving ahead.

The Germany-based sports, outdoor and fitness company reported first-quarter revenue of EUR 3.273 billion (USD $4.78 billion) in the first quarter of 2011 – up 22 percent in euro, and up 18 percent on a currency-neutral basis, from a year ago.

Adidas’ net income rose 25 percent to EUR 209 million (USD $305 million).

Retail sales saw the strongest growth – up 26 percent from a year ago due to double-digit growth of comparable store sales. Wholesale, a bulk of Adidas’ business, grew 22 percent.

By region, Adidas said it saw its strongest growth in China (up 43 percent) Russia (up 28 percent) and North America (up 28 percent), followed by Latin America (up 21 percent), Western Europe (up 16 percent) and other Asian countries (up 16 percent).

The strong performance led Adidas to increase full-year 2011 revenue projections to high-single-digit growth on a currency-neutral basis – up from the previous expectation of mid- to high-single-digit growth.

Coming off the 2010 FIFA World Cup, Adidas said it plans for a decrease in operating expenses in 2011, such as sales and marketing, although it plans to boost marketing investments to support its Reebok brand growth strategy in the men’s and women’s fitness category.

(Conversion of euros into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of May 5, 2011.)

Garmin 1Q revenue, profit up

Garmin Ltd. (Nasdaq:GRMN) reported strong first-quarter revenue and profit growth, despite more moderate growth from its outdoor sector.

The satellite navigation company reported revenue of $508 million for the first quarter 2011 – up 18 percent from the same period a year ago. Its quarterly net income rose to $95.5 million, or $0.49 per diluted share, versus a net income of $37.3 million, or $0.19 per diluted share, a year ago.

Garmin’s outdoor sector revenue grew just 12 percent to $67 million, trailing companywide growth. The strongest sales in outdoor were from the company’s high-end GPSMAP® 62 handheld and its Astro dog-tracking system.

By segment revenue growth, Garmin’s fitness business led the way with a 30-percent increase to $56 million. Its marine segment grew 24 percent to $51 million, its automotive/mobile segment rose 20 percent to $265 million and its aviation segment rose 5 percent to $69 million.

This was the first time Garmin split its outdoor and fitness segment to better distinguish revenue growth figures moving forward.

Globalstar narrows loss on new sattelites

Globalstar Inc. (Nasdaq:GSAT), maker of Spot Satellite Messenger used in the outdoors, narrowed its loss with help from new satellites and higher revenue in the first quarter.

The Covington, La.-based company reported first-quarter 2011 revenue of $18.3 million – up 17 percent from revenue of $15.6 million. Globalstar narrowed its quarterly loss to $6.5 million, an improvement from a loss of $35.6 million a year ago.

“The decreased net loss was primarily due to a change in non-cash items including an increase in derivative gain/loss of approximately $31.4 million offset by an increase in depreciation, amortization and accretion expense of $4.7 million primarily related to the new second-generation satellites coming into service,” company officials said in the earnings release May 5.

In March, the Federal Communications Commission granted Globalstar conditional authority to operate its second-generation satellites within the United States, which the company expects to do so soon to improve coverage.

Along with the earnings release, the company announced plans for the second launch of six new second-generation satellites in July 2011.

Outdoor Channel losses improve, but revenue down

Outdoor Channel Holdings Inc. (Nasdaq:OUTD) shaved its first-quarter losses, but saw its revenue decline on a reduction of its production services.

The outdoor media company reported first-quarter 2011 revenue of 14.8 million – down 17 percent from a year ago. Outdoor Channel reported a quarterly loss of $830,000, or a loss of $0.03 per diluted share, compared to a net loss of $1.5 million, or a loss of $0.06 per diluted share a year ago.

Despite the 56 percent decline to $2.5 million in production services, which the company had planned to reduce, Outdoor Channel increased its advertising revenue by 4 percent to $7.6 million. Subscriber fees declined 2 percent to $4.7 million.

–Compiled by David Clucas

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