Adidas Group has reported a 27% increase in net income for the second quarter, with integration costs for Reebok behind the German company and synergies in place.

Group revenues grew 3% on a currency-neutral basis despite a tough comparison with the prior year as a result of high sales related to the 2006 FIFA World Cup.

A strong sales increase at brand Adidas was reported, as well as underlying sales growth in the TaylorMade-Adidas Golf segment. Reebok sales, however, declined in the second quarter.

Second quarter gross margin increased at the group as a result of integration-driven cost synergies which positively impacted the cost of sales of both Adidas and Reebok and underlying improvements in the Reebok segment, the company said.

In addition, the non-recurrence of negative impacts from purchase price allocation in the Reebok segment also positively impacted gross margin development.

Adidas Group currency-neutral sales grew 6% in the first half of 2007 on a currency-neutral basis, driven by sales growth in the Adidas segment, the inclusion of an additional month in the Reebok segment versus the prior year and underlying sales increases at TaylorMade-Adidas Golf.

Adidas Group sales grew strongly in all regions except North America, driven by brand Adidas as well as the consolidation of six months of Reebok's revenues in the first half of 2007 versus only five months in the prior year. Sales in North America decreased 10% to EUR1.429bn from EUR1.592bn in the prior year. Revenues in Asia grew 7% to EUR1.036bn and sales in Latin America grew 28% to EUR310m.

"In the first six months of 2007, we have built on the tremendous success of the prior year," said Adidas chairman and CEO Herbert Hainer. "Ongoing strength in key performance categories has driven solid top-line growth at Adidas and like-for-like sales increases at TaylorMade-Adidas Golf. We have made important investments at Reebok as we continue to implement our strategies to bring the brand back to the top of its game."

The company confirmed its full year guidance that sales in 2007 would grow at a mid-single-digit rate and group's operating margin would be around 9%, which will be modestly higher than in 2006. Net income attributable to shareholders is expected to grow at a double-digit rate, approaching 15%.

Hainer added: "Our strong first half year reflects the strength and diversity of our group despite challenging market conditions in some of our key markets. Today marks the one-year countdown to the 2008 Beijing Olympics which promises to be one of the most exciting sporting events ever. And I am fully confident in our ability to deliver sustained profitable momentum in 2007 and beyond."