November 3, 2011 / 7:06 AM / 6 years ago

UPDATE 2-Adidas raises 2011 outlook on emerging markets

* Says now sees forex adj 2011 sales growth close to 12 pct

* Says sees 2012 EPS up 10-15 pct

* Q3 oper profit up 7.3 pct at 441 mln eur vs 442 mln poll avg

* Shares decline 3.4 pct, DAX falls 1.4 pct

FRANKFURT, Nov 3 (Reuters) - Germany’s Adidas AG lifted its 2011 sales outlook on strong demand for its sporting goods in emerging markets and as it expands its high margin brand-name stores.

Adidas now expects 2011 sales to increase at a rate close to 12 percent, adjusted for currency swings, where it had previously seen an increase of around 10 percent, the company said on Thursday.

“This will be driven by the Group’s high exposure to fast-growing emerging markets, the further expansion of Retail as well as continued momentum at all key brands,” said Adidas, which is the world’s second-largest maker of sports apparel after Nike .

This is the fourth time this year Adidas has upgraded its sales forecast as demand for its three-stripe branded products soars, with running shoes and fashion products proving especially popular with U.S. and Chinese consumers.


For 2012, Adidas said it was now setting its sight on growth in earnings per share of 10-15 percent, driven by the UEFA European soccer championship in Poland and Ukraine and the 2012 Olympic Games in London.

Revenue next year is projected to increase at a mid to high single-digit rate on a currency-adjusted basis.

Operating profit in the third quarter rose 7.3 percent to 441 million euros ($609 million), just shy of the 442 million expected on average by analysts.

Quarterly sales of 3.74 billion exceeded the average analyst estimate of 3.65 billion.

Adidas said it was on track to reach sales of 17 billion euros by 2015, aiming to grow faster than its rival Nike.

For now, the U.S. sports-equiptment industry leader is having a harder time passing higher cotton and rubber prices and soaring labour costs in China along to customers.

Nike reported a 2.7 percentage point slide in gross margins to 44.3 percent during the three months to August and projected a further decline by 2 percentage points in the quarter to November.

Adidas, in turn, forecast a 2011 gross margin of 47.5-48 percent, compared with 47.8 percent last year.

“Although we continue to face pressures from higher input costs as well as volatility on currency markets, we are well prepared for continued top- and bottom-line growth,” Chief Executive Herbert Hainer said.

The group also said it agreed to buy Five Ten, a U.S. maker of shoes for climbing and biking, for $25 million, taking a small step to shore up its fledgling outdoor equipment business. Adidas wants to more than double sales of that business to above 500 million euros by 2015.

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