Adidas sees sales comeback

Sporting giant Adidas has upped its sales forecast after reporting third-quarter net profit rose 25%. The company saw increased sales in all its regional markets and at its Reebok unit and said net profit in the three months ended Sept. 30 was €266 million

($375.6 million) compared with €213 million a year earlier. Revenue increased 20% to €3.47 billion from €2.88 billion.

For the 2010 fiscal year, Adidas now forecasts sales to rise around 8%, driven by strong growth at Reebok, exposure to emerging markets and the 2010 soccer World Cup. Looking to 2011, Adidas said sales are now expected to increase at a "mid-single-digit rate," with a jump in net profit also expected.

"We have made an explosive comeback in 2010, and I fully expect us to round off the year on a high," said Chief Executive Herbert Hainer.

Although the lower value of the euro at the start of the third quarter boosted sales, currency volatility and higher input costs are expected to affect earnings in future quarters, Adidas warned.

Sales from Western Europe increased 8% during the third quarter, driven by growth in the soccer category, while sales in emerging European markets were up 16% on strong retail and wholesale growth. The Chinese market booked a 9% increase in sales during the period, driven by the wholesale and retail businesses, and North American sales grew by 14%.

The Herzogenaurach, Germany-based company, said it expects earnings per share to increase faster than sales, or at a rate of between 10% and 15% in 2011, based on a gradually improving consumer market.

Image: Adidas Jeremy Scott