Big earnings for Adidas

BERLIN (AP):

Sportswear maker Adidas AG yesterday reported a 25 per cent increase in third-quarter earnings, helped by strong demand for football products and a return to growth in its Chinese business, and raised its full-year outlook.

Adidas said it made a net profit of €266 million (US$373 million) in the July-September period, up from €213 million a year earlier.

Revenues climbed 20 per cent to €3.47 billion from €2.89 billion. In currency-neutral terms, Adidas said revenues were up 10 per cent; the euro traded above this year's levels in the third quarter of 2009.

The company raised its earnings forecasts for the full year and now expects sales to increase by about eight per cent on a currency-neutral basis, up from a previous forecast of a mid-single-digit rise.

Positive effects

It pointed to "positive effects" from this year's football World Cup, as well as "high exposure to fast-growing emerging markets, as well as strong improvements at the Reebok brand".

It forecast earnings per share ranging from €2.68 to €2.70. In August, it had predicted a figure between €2.50 and €2.62; last year's figure was €1.22.

Adidas forecast that, on a currency-neutral basis, sales will grow at a mid-single-digit rate in 2011. It added that, although rising labour costs and currency volatility could dampen profitability, earnings per share should increase faster than sales, by between 10 and 15 per cent.

"We have made an explosive comeback in 2010, and I fully expect us to round off the year on a high," CEO Herbert Hainer said, although "the fourth quarter is a seasonally small one in terms of sales and profit."

"We are ready to face any challenges 2011 may bring our way," Hainer added in a statement. "And I am already confident we have what it takes to deliver considerable top- and bottom-line improvements in the year ahead."