Adidas AG, the global sports goods maker that makes Adidas and Reebok branded sportswear, said that first quarter profits jumped due to the Superbowl and the forthcoming 2010 FIFA World Cup.
The Germany-based company said on Tuesday that profits for the quarter ended March 31 was 168 million euros (US$222.4 million), up from a profit of 5 million euros (US$6.6 million) from the same period a year ago.
"We had a great start to the year, achieving record first quarter sales driven by growth in all segments," CEO Herbert Hainer said in a statement. "Our retail segment, record football sales and a strong performance for Adidas and Reebok in North America were some of the main catalysts driving this development." The company acquired Reebok in 2005.
Adidas is the world’s second-largest sportswear maker, behind Nike Inc. Sales were up in all markets except China, where sales slid 20 percent, the company said. Sales in North America were up 10 percent, and sales in Western Europe increased 4 percent, mainly due to apparel related to the 2010 World Cup in South Africa.
Success Hinges on World Cup 2010
On Tuesday, Adidas revised up its 2010 forecast, pinning its hopes on the World Cup to boost revenues and reaffirmed its belief in Reebok, especially its line of toning shoes, which has been selling briskly.
“With the Reebok turnaround gathering pace and the FIFA World Cup kicking off in a few weeks, we have a lot of reasons to be optimistic," Hainer said. The company also credited expected 2010 growth to “high exposure to fast-growing emerging markets.”
Indeed, Adidas has a lot of stake in the success of the World Cup, the most popular sporting event in the world. Adidas is the official sponsor of the event, and equips the referees and provides the official match soccer balls. In addition, it supplies uniforms for 12 teams, including host country South Africa. To compare, Puma supplies 7 teams and Nike 10.
Herbert Hainer, CEO of German sports equipment and clothing maker Adidas, poses with a football at a press conference to present Adida's 2009 results on March 3, 2010 in Herzogenaurach, southern Germany.Timm Schamberger/AFP/Getty Images