"Lacklustre" Europe takes toll on Adidas Adidas said "lacklustre" European demand and unfavourable currency developments would make the German sportswear company's full-year targets more difficult to achieve. The brand with the three stripes weathered a difficult second quarter in Europe in which it was unable to rely on a boost from any big sporting events such as the London Olympics, which lifted the comparable period last year. Second-quarter sales, adjusted for currency swings, were stable but subject to wide regional variation. Western European sales fell 11 per cent but sales in China increased 6 per cent while Latin America saw a 21 per cent increase. The group's gross margin increased 1.8 percentage points to 50.1 per cent in the second quarter and net income attributed to shareholders rose 4 per cent to €172m, compared with the same three-month period a year ago. That figure fell narrowly short of a €175.8m consensus net income forecast compiled from analysts by Bloomberg. Adidas said the weak trading environment in Europe and adverse currency swings would weigh on full-year sales expectations. Sales in 2013 are now expected to increase by a low to mid single-digit percentage; it previously forecast a mid-single digit growth rate. However, Adidas reiterated guidance for earnings per share to increase 12-16 per cent. The shares dipped as much as 3.9 per cent early on Thursday but by midday had recovered to trade down 0.6 per cent at €85.26 in Frankfurt. Citi Research said the results were "broadly in line with consensus forecast." Its analyst Richard Edwards noted that during the first half Adidas had "delivered solid revenues" in a non-event year "alongside gross and operating margin expansion."