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Adidas bullish ahead of World Cup

Adidas has raised its sales forecast for the year after the forthcoming FIFA World Cup drove strong retail sales over the first quarter and its troubled Reebok brand showed signs of revival.

Group revenues increased by 4% to €2.6bn (£2.2bn) over the first three months of year due to growth in its wholesale and retail segments as well as in its other businesses division, which includes TaylorMade-adidas Golf.

Currency-neutral sales in its wholesale division rose by 1%, driven by higher sales of the Adidas brand, while retail saw a 16% rise, through strong sales of Adidas and Reebok.

Revenues in Western Europe, taking currency translation into account, rose by 5% to €945m (£809m) compared to €899m (£769) in 2009 due to higher sales in the UK and Germany.

European emerging markets grew by 1% to €290m (£248m). In North America, sales rose by 10% to €585m (£500m) compared to €532m (£455) in 2009 and Latin America reported a 24% increase to €271m (£232). Meanwhile, sales in Greater China fell sharply by 10% to €198m (£169.5m) although Other Asian markets saw a modest 1% rise.

Herbert Hainer, Adidas Group chief executive, said: “We had a great start to the year, achieving record first quarter sales driven by all segments. Our retail segment, record football sales and a strong performance for Adidas and Reebok in North America were some of the main catalyses for driving this development.”

Adidas had already predicted a strong year driven by the World Cup, which kicks off in South Africa in June; while increased marketing for the Reebok brand has led to signs of a turnaround for the brand. It reported a 1% increase in sales for Reebok, which it is focused on growing Reebok’s presence in muscle toning and conditioning, and a 4% increase for the Adidas brand on a currency neutral basis.

Hainer added: “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. Therefore we feel confident to raise the bar and increase our full-year guidance.”

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