Adidas Q2 strong despite limping Reebok

Adidas Q2 strong despite limping Reebok
Photo: DPA
Adidas, the second biggest sports equipment maker, posted Tuesday a 12 percent increase in second quarter net profit, although its troubled US unit Reebok saw first-half sales fall by 11 percent.

Adidas recorded a net profit of €116 million ($180 million), in part owing to a reduced tax rate, it said in a statement.

Group sales gained five percent to €2.52 billion from the same period one year earlier, while operating profit was up by 10.3 percent at €208 million. But Reebok’s results continued to lag behind, as the group posted sales of 469 million euros over the three-month period, a drop of 8.8 percent from the second quarter of 2007.

For the first half, Reebok sales lost 11.1 percent to €923 million. The division’s order backlog decreased by 21 percent when adjusted for foreign exchange effectes, which the group said reflected the “short-term impact of strategic initiatives to revitalize the Reebok brand in the USA, the UK and Japan.”

Adidas chief executive Herbert Hainer said in a statement that “we have laid the foundation at Reebok for continued improvement in the second half of the year.” Meanwhile, the parent company was “firmly on track to achieve all of our financial goals for 2008,” Wainer said.

“We even expect to exceed some of our original goals,” he added without elaborating.

Adidas has set a 2008 goal of increasing group sales by more than 10 percent, and said on Tuesday that sales at Reebok were “projected to grow at a mid- to high-single-digit rate in 2008.”

The German group is counting on the European football championship and Beijing Olympic Games to boost its full-year earnings.