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World Cup powers Adidas to strong Q2

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World Cup powers Adidas to strong Q2
13:56 CEST+02:00
Adidas, the world's second biggest sports equipment and clothing maker, raised its earnings per share outlook on Wednesday after raking in strong second-quarter profits thanks to the 2010 World Cup in South Africa.

The Bavarian-based group that also owns the US brand Reebok had already said football-related sales should reach €1.5 billion ($1.98 billion) in 2010, which meant overall profit should rise.

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

"Sales momentum at both Adidas and Reebok accelerated in the second quarter with currency-neutral sales increasing 13 percent and 16 percent respectively."

Adidas said earnings per share should now increase to between €2.50 and €2.62, compared with a previous estimate of €2.05 to €2.30.

On the basis of the number of free-floating shares, that would give a full-year net profit of between €523 million - €548 million, up from €430 million - €480 million. Adidas sponsored 12 of the 32 teams that competed in the World Cup, including Spain, the new world champion, and Germany, which finished third.

Second-quarter operating profit leapt by 172 percent to €195 million, as other lines also benefited from a global economic rebound and foreign exchange effects.

The group cited in particular a rise in the value of the Russian rouble and a decline in operating overhead spending as factors behind its improved outlook.

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