Sporting goods firm Adidas posted a fourth-quarter net loss of €4 million after incurring costs in its takeover of US rival Reebok.
The net loss from continuing and discontinued operations after minorities compared with a net profit of €20 million a year earlier.
Adidas bought Reebok for $3.8 billion to take on sector leader Nike, but a sales slump in the third quarter at the US firm has raised worries a revamp might be necessary.
Fourth-quarter sales rose 27.2 per cent to €1.521 billion, lifted by strong demand for soccer products ahead of the World Cup, Adidas said. That beat the average analyst forecast of €1.3 billion.
For 2006, Adidas said earnings would grow at a double-digit percent rate and sales at a high double-digit growth rate.
Adidas said its orders were up 15 per cent at the end of 2005, but orders at Reebok were down 24 per cent in US dollar terms.
For the year as a whole, net income rose almost 22 per cent to €383 million, also missing the average forecast of €392 million. Full-year sales rose to €6.636 billion, beating the poll average of €6.410 billion.
Adidas shares have risen some 14 per cent in the past three months on the back of strong demand for soccer products, making them more expensive than Nike shares.