German sportswear giant Adidas reported on May 10 a fall in first-quarter profit that was better than analysts expected, after managing to halt poor sales of its Reebok brand.
Adidas, the world number two in the sportswear market behind Nike, reported net profit was down 11 percent to 128 million euros compared with 144 million euros in the same period in 2006.
Analysts polled by the Thomson Financial agency had predicted net profit of 123.08 million euros.
Adidas had already said it expected a drop of between 10 and 20 percent in net profit in the quarter due to the costs of absorbing the Reebok brand, which it acquired in January 2006.
Turnover was up three percent to 2.54 billion euros, still showing the positive effect of last year's football World Cup finals in Germany. However, the impact of the World Cup "will not be repeated in the second quarter," Adidas said in a statement.
The results showed that Reebok sales had increased for the first since Adidas acquired the American brand. "The merger with Reebok is now starting to pay off and we can already achieve the first synergies," Adidas chief Herbert Hainer said.
Analysts said Reebok appeared to have turned the corner.
Nils Lesser of Merck Finck said: "The worst at Reebok should be over and the outlook for the brand Adidas in the US appears by far as not frightening as one quarter ago."
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