2006 sales jump on World Cup, Reebok: Adidas

Frankfurt, Mar 7: Adidas, the world's second-biggest sport goods maker, said its 2006 sales grew 52 percent, boosted by the soccer World Cup in Germany and the purchase of Reebok in the United States.

Sales last year were 10.08 billion euros, Adidas said in a statement on Wednesday, and earnings before interest and tax (EBIT) rose by a quarter to 881 million euros (.16 billion).

Rival German sports goods firm Puma sponsored a soccer World Cup winner for the first time last year when Italy beat Adidas's partner France, giving a boost to sales prospects for replica shirts.

The stakes were high in the competition, with the industry spending millions of euros in sponsoring teams to bolster brands and lift sales of products such as jerseys and soccer boots. Italy beat France in the final in a penalty shootout.

Fifteen analysts polled by Reuters had forecast an average EBIT of 897 million euros and sales of 10.11 billion euros.

''We strengthened our brand portfolio by acquiring Reebok and exceeded the 10 billion euro sales mark for the first time,'' Adidas Chief Executive Herbert Hainer said.

The company added it would propose a 2006 dividend of 0.42 euros per share, compared with 0.33 euros for the previous year.

During the fourth quarter, sales rose nearly 48 percent to 2.25 billion euros, and EBIT jumped to 52 million euros from 35 million euros in 2005.

Analysts had forecast sales of 2.24 billion euros and EBIT of 75 million euros.

Adidas said it expects 2007 sales to increase at a mid single-digit percentage rate. Gross margins are expected to be between 45 and 47 percent, driven by improvements in all three brands, in particular Reebok.

Net income is expected to grow 15 percent in 2007.

Adidas shares were indicated down more than 2 perent, according to pre-market data from brokers.

REUTERS