August 4 - Adidas, the world's second-largest sports clothing company, raised its year forecasts again on Thursday after seeing a 5 percent rise in sales in the second quarter thanks to strong demand in China.

The Adidas Neo brand

Adidas, which competes with Nike and smaller rival Puma, has already raised its sales outlook twice this year as demand for sportswear soars.

The German group said on Thursday it now expects sales this year to be up 10 percent and earnings per share up by 15 percent, with demand in North America also remaining strong.

That compares with previous forecasts for sales to increase by a high single-digit percentage rate and earnings by between 10 and 15 percent.

"No matter which retailer I speak to, or which market share statistic I read, our product sell-throughs are stronger than they have ever been," Chief Executive Herbert Hainer said in a statement.

Its shares were up 4 percent at 50.91 euros by 0815 GMT.

"It's certainly a good sign when a company raises its outlook in the current financial climate," a Frankfurt-based trader said.

"Good for the sentiment in our opinion is especially the positive outlook for the U.S. business in the remainder of the year," DZ Bank analyst Herbert Sturm said.

Adidas also said the decline in sales in Japan following the earthquake and tsunami there would likely be less severe than expected.

It had previously forecast a 15-25 percent drop in sales in the market, one of its most profitable.

Adidas reported second-quarter sales rose 5 percent to 3.06 billion euros ($4.36 billion) while its operating profit was up 12 percent to 219 million.

Analysts were on average expecting second-quarter sales of 3.07 billion euros and operating profit of 222 million according to a Reuters poll.

Sales in China in the quarter to end June jumped 41 percent, while North American sales rose 5 percent.

(Reporting by Victoria Bryan; Editing by Greg Mahlich)