GERMANY: adidas beats Q2 expectations with World Cup boost
Sports goods company adidas has risen above expectations with a 24% rise in second-quarter profit, helped by the recent football World Cup.
Quarterly net income was EUR82m (US$105.4m) compared to EUR66m a year ago.
The company, which bought smaller rival Reebok last year, said group revenues were up 60% to EUR2.43bn in the second quarter.
The consolidation of Reebok as well as better-than-predicted double-digit growth at adidas and TaylorMade-adidas Golf both attributed to this growth.
Sales for the adidas Group excluding Reebok grew 20% to EUR 1.8bn from EUR1.52bn in the prior year.
For the first half of the year, group revenues grew 53% to EUR4.89bn EUR 3.20bn in 2005. Sales excluding Reebok grew 19% to EUR3.8bn.
"The adidas Group had an outstanding first half of 2006 crowned by our strong showing at the World Cup," said adidas AG chairman and CEO Herbert Hainer.
"adidas and TaylorMade-adidas Golf's top-line performance was impressive and Reebok delivered sequential improvement in line with our expectations."
The adidas segment was the main driver for the group's organic sales growth in the first half of 2006, the company said. Currency-neutral adidas revenues increased 15% during the first six months.
As well as the World Cup, increases in nearly all Sport Performance categories as well as double-digit growth in the Sport Heritage and Sport Style divisions contributed to growth.
The company expects a full-year income rise of up to 31% to about EUR500m. Group sales are expected to increase by a 'strong' double-digit percentage rate.
Hainer concluded: "We have a pipeline full of operational initiatives for the remainder of the year, and we are on track for continued success."
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