Adidas reported ann 11.7% rise in second-quarter net income on thanks to strong sales in Asia and Latin America and it slightly raised its 2008 outlook. Net income rose to €116 million ($180.9 mm) from €104 million ($140 mm) a year earlier. Sales rose 5% to €2.52 billion ($3.94 bn), above expectations. Excluding currency fluctuations, sales increased 14%.


The Adidas brand order backlog was up 8% at the end of the quarter on a currency-adjusted basis, while the order backlog at its Reebok brand fell 13%.


Thanks to what the firm termed an improving regional and product mix, retail expansion and favorable currency movements, gross margin reached 50.1%, up 2.7 percentage points versus the second quarter of 2007. Operating profit rose 10% to €208 million ($325 mm).


Sales remained weak in North America, falling 19% to €1.160 billion ($1.78 bn). Boosted by the Euro 2008 football championships, European sales increased 11% to €2.35 billion ($3.6 bn). In Asia, sales spiked 17% to €1.21 billion ($1.86 bn) and in Latin America business grew 23% to reach €381 million ($583.1 mm).


For the first-half, earnings grew 23% to €286 million ($437.7 mm) on sales that rose 4% to €5.14 billion ($7.87 bn). Revenues for the Adidas brand grew 10%, while Reebok’s revenues fell 11% and business at TaylorMade-Adidas Golf remained flat. Operating profits rose 17% to €490 million ($750 mm).


“Our performance in the first half of the year puts us firmly on track to achieve all of our financial targets for 2008,” stated Adidas chief executive officer and chairman Herbert Hainer. “We even expect to exceed some of our original goals and at the upcoming Olympic Games, we are ready to showcase the power of our brands to audiences around the world.”


For the full-year, the Adidas group expects a high single-digit sales rise, in currency-neutral terms. The company raised its forecast for Adidas brand’s sales to low double-digit growth from high single-digit previously. The group also increased its full-year gross margin forecast to 48% from 47.5% and raised its guidance for operating margin which it said is likely to approach 10% versus 9.5% previously.