Adidas sees stronger 2010 earnings after 2nd-quarter profit soars to $166 million

Adidas sees stronger 2010 earnings after good Q2

BERLIN — Sportswear maker Adidas AG raised its full-year earnings forecast on Wednesday after the World Cup helped drive up second-quarter revenues and profit.

Adidas said it now expects earnings per share for the full year of between €2.50 and €2.62, compared with a previous forecast of between €2.05 and €2.30. Last year’s figure was €1.22.

The company, based in Herzogenaurach, Germany, confirmed previously released second-quarter figures: an increase in net earnings to €126 million ($166 million) from €9 million a year earlier, and an 18.7 percent increase in revenues to €2.92 billion from €2.46 billion.

“We had an outstanding first half year driven by the FIFA World Cup 2010 and the resurgence of the Reebok brand in North America,” CEO Herbert Hainer said. “Sales momentum at both Adidas and Reebok accelerated in the second quarter.”

Adidas was one of the official sponsors of the World Cup and outfitted teams including champion Spain and third-place finisher Germany. Most of the June-July tournament in South Africa fell in the second quarter.

Revenues benefited from currency effects, Adidas said. The euro declined in the second quarter on worries about Europe’s debt crisis and hit a four-year low of less than $1.19 in June; it has since gained more than 10 U.S. cents but remains well below its level late last year.

On a currency-neutral basis, Adidas said its group revenues were up 11 percent in the second quarter.

The company said it still expects revenues to grow at a mid-single-digit rate this year in currency-neutral terms thanks to the World Cup, improvements at Reebok and “high exposure to fast-growing emerging markets.”

First-half net earnings increased to €295 million from €13 million. Revenues rose 11 percent to €5.59 billion from €5.03 billion.

Investors appeared unimpressed by the revised outlook. Adidas shares were down 2.7 percent in Frankfurt trading at €40.78.