FRANKFURT, Germany (AP) -- Athletic apparel and equipment maker Adidas AG reported a 22 percent rise in third-quarter profit even as sales in North America, including the key U.S. market, slid nearly 9 percent.
The Herzogenaurach-based company, which is second to Nike Inc. in terms of market reach and ahead of cross-town rival Puma AG, said Thursday that it earned $438.72 million in the July-September period compared with $358 million a year earlier. The results were lifted by combining Adidas' and Reebok's purchasing agreements with suppliers, resulting in lower costs.
Shares of Adidas were up 3.1 percent to $69.61 in Frankfurt.
"Our third quarter performance is clear evidence that we are on track to achieve all of our full year targets," Chief Executive Herbert Hainer said in a statement. "We are continuing to realize material net benefits from the Reebok integration process."
He said that the Adidas brand was "in top shape" and had "the highest backlog growth in over nine years."
The order backlog is a key barometer for analysts because it can divine future sales. For the Adidas brand, the company said the backlog was up 16 percent in the third quarter. Orders for Reebok, which Adidas bought in a $3.8 billion deal in 2006, were down 2 percent.
Sales, however, slipped by 0.3 percent to $4.33 billion from $4.32 billion as gains by Adidas-brand products were offset by a 6.5 percent drop in sales of Reebok goods and a 2.2 percent drop in TaylorMade-adidas Golf products.
By region, the company posted an 8.9 percent drop in sales in North America, with revenue totaling $1.2 billion compared with $1.3 billion a year earlier. That was countered by a 30.4 percent rise in Latin American sales to $256.16 million from $195 million a year earlier.
In Asia, where soccer products are growing in popularity, sales were up 9.2 percent to $852.4 million from $777 million in 2006.
In Europe, the company reported a modest uptick of 0.3 percent to $1.97 billion from $1.95 billion a year earlier.
For the January-September period, the company's net profit was up 13 percent, which it said was the result of lower expenses and an increased operating profit.
Adidas earned $780.27 million in the first nine months of the year, compared with $687 million a year earlier, and ahead of the $761.13 million that analysts polled by Dow Jones Newswires had forecast.
Sales rose about half a percent to $11.6 billion in the January-September period, compared with $11.49 billion in the year-ago period, a soft increase pinned to slower sales in the United States and effects of the rising euro, which hit a record high of $1.4730 on Wednesday. Analysts had forecast sales of $11.65 billion.
Hainer said the company, which provides clothing, uniforms and equipment for a variety of sports, ranging from soccer to track and field, expects its overall net profit to rise 15 percent for 2007.
"Our group is set for continued growth in the rest of 2007 and beyond," he said.
Separately, the company said that Henri Filho, 76, resigned as chairman of the company's supervisory board, the equivalent to a U.S. board of directors, for personal reasons late Wednesday. He was replaced by Hans Friderichs, 76, the board's deputy chairman.
Copyright 2007 Associated Press. All rights reserved.
