European News

07, May 2013.

Adidas, the world's second-biggest sportswear firm, has posted higher profits despite seeing sales fall in the first three months of 2013.

The German company said more people were buying its higher-priced items, helping net profits rise 6.5% to 308m euros (£260m).

Its gross profit margin on sales was 50.1%, only the second time it has ever reported a figure above 50%.

In Frankfurt, Adidas shares jumped almost 6% in early trading.

Adidas chief executive Herbert Hainer said the results were particularly impressive, given that in the same quarter last year, sales rose in the run-up to the Olympics and European football championships.

A double-digit decline in revenues at Reebok, plus exchange-rate effects, hit first-quarter group sales, which at 3.75bn euros fell just short of analysts' expectations.

Adidas has been struggling with problems at Reebok, and took a 265m-euro writedown on the brand last year.

Reebok lost a major US football contract with the NFL and a fraud was uncovered at its Indian operations.

Adidas plans a drive to boost Reebok sales in 2013, with a focus on yoga, dance and fitness training.

DZ Bank analyst Herbert Sturm described the results as excellent. "The most important news of today is that the Adidas group is able to deliver margin improvements in a difficult market environment," he wrote in a research note.