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Aug 4, 2010
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Adidas raises outlook after consensus-beating Q2

By
Reuters
Published
Aug 4, 2010

FRANKFURT, Aug 4 (Reuters) - Adidas (ADSG.DE), the world's No.2 sporting goods maker after Nike (NKE.N), raised its outlook on Wednesday after the World Cup football tournament helped boost retail sales by 20 percent in the first half of the year.

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The company said that it now sees expects earnings per share to increase to a level of between 2.50 euros ($3.27) and 2.62 euros, corresponding with full-year net profit of 520-550 million euros.

In May, Adidas had already raised its outlook, saying it saw 2010 profit to rise to between 430-480 million euros after posting weak results for 2009.

Adidas, which sponsored 12 teams in the World Cup, already reported on July 22 second-quarter net profit that jumped fourteenfold, exceeding analyst estimates.

"We had an outstanding first half year driven by the FIFA World Cup 2010, and the resurgence of the Reebok brand in North America," Chief Executive Herbert Hainer said on Wednesday.

Adidas provided World Cup match balls and equipped teams including host nation South Africa and European champion Spain, which it said will boost 2010 revenues from soccer-related products to at least 1.5 billion euros.

The company sees its gross profit margin for 2010 at 47.5 percent, up from 45.4 percent in 2009.

It also said it now sees its operating margin for the year to be around 7.5 percent, compared with 4.9 percent in 2009. Adidas previously expected a margin of 7.0 percent.

Rival Puma (PUMG.DE), the world's No. 3 sporting goods maker, last week scrapped its full-year pretax profit forecast citing potential costs associated with litigation in Spain, after posting first-half results below expectations.

But it said its outlook for the second half remained strong and kept its 2010 sales growth aim of low to mid-single digits.

Global No.1 Nike is due to report its fiscal first-quarter earnings on Sept. 23.

Nike's smaller but fast-growing rival Under Armour (UA.N) last week reported far stronger than expected quarterly profit as it saw heavy demand for its sports apparel and boosted its full-year financial outlook.

(Reporting by Maria Sheahan and Josie Cox)

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