"It is too soon to comment on this case," said an Adidas spokeswoman, adding that the company used kangaroo skin for sports shoes like its Predator football boots promoted by British soccer star David Beckham.

She was speaking at the company's annual shareholder meeting, which saw a small protest by animal rights campaigners, including one dressed up as a kangaroo.

In the text of a speech to be presented at the meeting Adidas Chief Executive Herbert Hainer made no reference to the lawsuit. He said the firm was on track to hit its 2003 profit goal of 10-15 percent net income growth.

The U.S. suit also named several California stores that sell Adidas shoes that they say use kangaroo leather. The case seeks to halt imports of those products.

Shares in Adidas, the second biggest sportswear firm by sales after U.S. giant Nike (NKE.N), fell three percent by 0930 GMT, underperforming the German blue-chip DAX index .

KANGAROO SKIN

But retail analysts played down the likely impact of the lawsuit, which is the culmination of an extended animal rights campaign to halt the use of kangaroo skin.

"This is a storm in a teacup," said Gavin Finlayson, an analyst at Commerzbank in Frankfurt.

"It is nothing new. I sympathise with the concern about kangaroos but there seems to be no big reason to protect them," said the analyst, originally from Australia, who used to have a pet kangaroo as a child.

In response to the Viva! campaign Adidas issued a statement earlier this year, saying that it does not source leather from any endangered species.

Australian Agricultural Minister Warren Truss has also thrown his weight behind Austrailia's kangaroo leather industry, saying that the quality of the leather is soft and fine.

Analysts say all the major footwear firms use the skins, which are also turned into products like gloves and golf bags.

"I don't think Adidas is any big exception here, all sorts of firms use all kind of dead animal skins for their shoes," Commerzbank's Finlayson said.