Adidas pins hopes on World Cup as profit, sales stumble

FRANKFURT (Reuters) - Adidas continued to lose ground to larger rival Nike in Europe in the third quarter, putting pressure on the sports apparel group to make the most of sales opportunities offered by next year's soccer World Cup in Brazil.

Adidas, the world's second largest maker of sports gear behind Nike , said third quarter operating profit dropped 6 percent on sales down 7 percent, hit by distribution problems in Russia, currency effects and poor sales of golfing products.

Last year, results were boosted by the Olympics and the European soccer championships. But Adidas has been struggling to maintain the momentum this year, warning on sales and profit in September. Adding to its woes, it has been outperformed by Nike on its home turf.

 

Nike reported an 8 percent rise in sales in western Europe in its first fiscal quarter to the end of August, compared with a fall of 6 percent for Adidas at constant currencies in its third quarter.

Adidas Chief Executive Herbert Hainer said next year's World Cup and positive feedback for its upcoming collections gave the group confidence.

"We have dealt swiftly and decisively with our challenges in the third quarter, to ensure we return to growth," Hainer said in a statement on Thursday. "Momentum will clearly return to our business in the fourth quarter and beyond."

One bright spot for Adidas this year has been the Reebok brand, which saw sales rise 5 percent in the three months to end-September, the second quarter in a row of growth as a renewed focus on fitness pays off.

For the third quarter, Adidas reported sales of 3.88 billion euros and operating profit of 463 million euros, both slightly below the average estimates in a Reuters poll.

The company maintained a forecast for sales to rise by a low single digit percentage in 2013 and to achieve an operating margin of around 8.5 percent. (Reporting by Victoria Bryan; Editing by Noah Barkin)