* Q3 sales 3.88 bln euros vs Reuters poll average 3.92 bln
* Q3 operating profit 463 mln euros vs poll average 466 mln
* Soccer boots, jerseys, running products to take on Nike
* Nike takes market share from Adidas in Europe
* Shares rise 3.5 pct, outperform DAX
By Victoria Bryan
FRANKFURT, Nov 7 Adidas forecast a
$2.7 billion boost to sales from next year's soccer World Cup
would help it over a tough 2013, and said it would fend off
rival Nike in hotly-contested European markets with
innovative running gear.
Adidas, the world's No. 2 maker of sportswear and
accessories, has struggled this year to maintain momentum after
a big boost in 2012 from the Olympics and European soccer
championship, and warned in September sales and profits would
not rise as much as expected.
The company confirmed on Thursday that third quarter
operating profit dropped 6 percent and sales fell 7 percent,
hurt by distribution problems in Russia, a currency hit in North
America and Japan, and poor sales of golfing products.
To make matters worse, Adidas lost market share to Nike on
its European home turf.
It had 13.2 percent of the western European sporting goods
market to Nike's 12.4 percent in 2012, according to data from
Euromonitor. Nike reported an 8 percent rise in sales in western
Europe in its fiscal first quarter to the end of August, while
Adidas posted a fall of 6 percent at constant currencies in its
Adidas Chief Executive Herbert Hainer denied a recent report
that Nike had overtaken Adidas in terms of soccer sales in
Germany and vowed to defend the group's prize business.
"We have a lot of ammunition to fight back," he told
journalists, noting that increased levels of World Cup stock -
jerseys and match balls - are now being shipped out ahead of
release in a couple of weeks.
Adidas will also launch more soccer shoes with the help of
Barcelona star Lionel Messi who fronts its new range of brightly
coloured Samba boots.
The sportswear firm traditionally performs well in years
with major sporting events. Its forecast for soccer sales of
more than 2 billion euros ($2.7 billion) in 2014 would be a
record and an increase of a third compared with 1.5 billion in
the last World Cup year.
Shares in Adidas, which hit a record high of 88.50 euros in
August, were up 3.5 percent and outperforming a flat wider
market at 1135 GMT as investors welcomed results as
forecast and looked to better earnings next year.
"All the bad news (is) on the table now," DZ Bank analyst
Herbert Sturm said, referring to the company's earlier profit
warning. "We expect a series of positive news flow in the next
months to come."
RUNNING AWAY FROM NIKE
Chief Financial Officer Robin Stalker explained a 6 percent
jump in inventories by saying the group had already increased
stock levels ahead of an expected upturn in demand.
"We anticipate sales in next three to six months to be
higher than the same period last year," he said.
Aside from soccer, Hainer said Adidas was well placed to
take on Nike in the running market, where it has increased sales
by 14 percent so far this year.
The group has launched two new running shoes this year -
Boost and Springblade, the first with cushioning in the sole,
the second with futuristic-looking blades on the sole. Hainer
said the latter was doing well with consumers in the United
States, Brazil and Russia.
"We will roll it out further in 2014," he said.
In a bid to outdo Nike's popular Fuelband fitness monitor,
Adidas has also unveiled a new running watch that can track the
wearer's run, heartbeat, offer coaching tips and play music.
"Losing leadership in Western Europe - their home market -
would be a very tough pill to swallow," said Euromonitor analyst
Magdalena Kondej. "But they recognise the threat and they
continue focusing on innovation. That puts them in a good
position once European markets recover."
A bright spot was the Reebok brand, where sales rose 5
percent in the three months to end-September, the second quarter
in a row of growth as a new focus on fitness pays off.
Hainer also said Adidas was making "good progress" on its
2015 targets for sales of 17 billion euros and an operating
margin of 11 percent, goals that had come under scrutiny after
the profit warning.
Third quarter sales were 3.88 billion euros and operating
profit 463 million ($626 million), both slightly below the
average estimates in a Reuters poll. Despite this, the group
improved its gross profit margin - a key measure of
profitability in the apparel industry - 1.9 percentage points to
49.3 percent on higher prices and sales in its own shops.
Adidas 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.