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| A ball game |
Frankfurt, Aug. 9 (Reuters): German sporting goods firm Adidas has reported a better-than-forecast 24 per cent rise in second-quarter net profit on Wednesday on the back of a surge in sales spurred by the soccer World Cup.
Adidas, the second-largest sporting goods firm after US giant Nike, said in a statement net profit attributable to shareholders rose to 82 million euros ($105.3 million), despite higher marketing expenses for the World Cup.
Analysts polled by Reuters had on average expected a net profit of 74 million euros, but individual forecasts had been in a wide range, reflecting uncertainty over the costs of World Cup marketing and the effects of a revamp at its Reebok unit.
Adidas, known for its three-stripe logo, had launched a record sales campaign for the World Cup to defend its position as market leader for soccer boots against increasing competition from Nike and arch rival Puma.
As a result, quarterly sales jumped 60 per cent to 2.428 billion euros, above the average forecast of 2.366 billion euros, with growth coming from all regions, including the tough European market.
For the full year, Adidas reaffirmed it expected double-digit percentage profit growth, with net income approaching 500 million euros in 2006 after 383 million euros a year ago.
Group sales would rise by a “strong” double-digit percentage rate. Adidas also increased its forecast for currency-neutral sales growth excluding Reebok to 10-12 per cent after earlier expecting a high single-digit percentage growth rate.
“In light of our strong performance in the first half of the year, we are confident that we will achieve our ambitious full-year targets,” chief executive Herbert Hainer said.
HVB analyst Uwe Weinreich said sales and earnings had been unexpectedly good, confirming his “outperform” rating. Equinet analyst Ingbert Faust also confirmed his “buy” rating, citing strong figures.
Despite recent losses after markets became choppy in May, Adidas shares are still more expensive than Nike stock in terms of price to earnings multiples.
