FRANKFURT, Germany _ Adidas AG said Wednesday that its second-quarter
net profit rose 24 percent as consumers snapped up its World Cup-related
merchandise and the effects of its acquisition of Reebok took hold.
But the company, which trails only Nike Inc. in global sales of sporting
goods and apparel, warned that the market for its products would see slower
growth this year.
Adidas earned euro82 million (US$105.2 million) in the April-June period
compared with euro66 million a year earlier. That exceeded the euro76 million
(US$97.5 million) expected by analysts polled by Dow Jones Newswires.
Sales rose nearly 60 percent to euro2.43 billion (US$3.1 billion) from
euro1.52 billion, also more than the euro2.37 billion (US$3 billion) expected by
analysts.
The results contrasted with those of Herzogenaurach-based Adidas' crosstown
rival Puma, the world's No. 3 sporting goods company. Puma's second-quarter
profits fell 15 percent despite a strong rise in sales because of hefty World
Cup-related marketing costs.
Adidas shares rose 3.5 percent to euro36.94 (US$47.57) in Frankfurt trading.
The company sponsored several teams at the June 9-July 9 World Cup, including
host Germany and Argentina. It benefited from sales of its Teamgeist soccer
ball, German for "team spirit," which it designed specifically for the
tournament.
Adidas has sold more than 15 million of the 14-panel balls, at a price that
has ranged from euro90 to euro110 (US$113 to US$138). The figures beat the
company's initial expectations of 10 million and blew past the 6 million
Fevernova balls it sold during the 2002 World Cup.
As a result, the company expects the World Cup tournament to help provide
more than euro1.2 billion (US$1.5 billion) in revenue from soccer-related
products, including shoes and replica jerseys. In all of 2005, Adidas had
euro6.6 billion in sales, with euro434 million in profit.
The company raised its full-year sales forecast for the Adidas brand and said
it expected growth to increase in the low double-digits. But it said that sales
of its Reebok-branded products were likely to dip in the coming months, citing a
drop in order backlogs for the unit's lifestyle-oriented shoes and clothing.
Adidas acquired Reebok for US$3.8 billion last year, completing the deal in
January.
"Reebok delivered sequential improvement in line with our expectations," said
Chairman and Chief Executive Herbert Hainer said.
The company said its backlog for Adidas products, which includes soccer and
now basketball gear, helped increase its order backlog by 9 percent from a year
ago.
