The German sports equipment and clothing maker Adidas today posted a whopping 97% drop in first quarter net profit to just €5m.
A company statement also said sales had fallen by a much more modest 2% to €2.58 billion in the first three months of the year.
'We feel the effects of the economic downturn in many of our key markets,' Adidas chairman and CEO Herbert Hainer said.
He added that the group's results had been 'materially affected by higher input prices, currency devaluation effects and restructuring costs.'
Adidas also announced a major restructuring of its operations that would include the elimination of regional headquarters in Europe and Asia.
'We are now in a position to make a game-changing structural refinement to our business,' Hainer said. 'The current economic climate adds urgency to accelerate our plans,' he added.
Employee reductions were planned at the group's Reebok, Rockport and TaylorMade-adidas Golf divisions, the statement said, but no figures were provided.
Looking ahead, it added that Adidas' operating margin was expected to decline, but that earnings per share were expected 'to be around breakeven in the first six months of 2009' before getting well back into the black later this year.
