German sportswear company Adidas AG said Wednesday its net income fell 30 percent in the third quarter as it saw sales decline, especially at its sport performance division.

Adidas, based in Herzogenaurach, said net income fell to euro213 million ($315 million) in the July-September period from euro302 million in the third quarter of 2008.

Revenue for the period fell 7 percent to euro2.9 billion from euro3.1 billion.

Adidas, which also owns the Reebok brand, said it expected sales to decline at a low to mid-single-digit rate in 2009, assuming unchanged currency values, due to weaker consumer confidence and rising unemployment in many major markets.

The company also said net income and earnings per share for the full year would decline, but expected them to rise during the second half of the year compared with the first half.

Adidas said earnings would be affected by higher sourcing costs for materials and higher labor costs as well as currency effects, particularly the depreciation of the Russian ruble.

"Due to a more moderate increase of input costs and positive impetus ahead of the 2010 FIFA World Cup, group profitability will be significantly better in the second half compared to the first half of the year," the company said in its report.

The football World Cup in South Africa next year is expected to add significantly to the company's revenue and earnings in coming months as fans snap up jerseys, balls and even cleats in the run-up and during the monthlong tournament which starts June 11.

The company's outlook and investors' anticipation for gains from the World Cup, the biggest sporting event in the world, helped push Adidas' shares 3.5 percent higher to euro33.75 in Frankfurt afternoon trading.

"This year, our industry and our group have faced unprecedented challenges," said Chief Executive Herbert Hainer in the report.

"However, we have tackled the challenges head-on. We have successfully adapted to our difficult surroundings. And our drive for operational excellence has meant we have strongly improved our financial position." Continued...