A few days before it was due to announce its quarterly performance on Aug. 4, the Adidas Group raised its guidance for the full year, on the back of a 13 percent sales increase to €4.4 billion in the three months to the end of June, and an operating profit that soared by 77 percent to €414 million.
The sales increase amounted to 21 percent in constant currencies. The stronger rise in operating profit came from a higher gross margin and operating expense leverage. Another part of the rise came from the early termination of the Adidas brand's endorsement deal with Chelsea football club, which raised the operating income by a mid to high double-digit euro amount. Net income from continuing operations nearly doubled, as it surged by 99 percent to €291 million. Basic earnings per share from continuing and discontinued operations actually doubled to €1.45.
The group is projecting a currency-neutral sales increase at a high-teens rate for the full year, compared with an earlier projection of a rise in the range of 15 percent. Net income from continuing and discontinued operations is forecast to increase at a rate of 35 to 39 percent, up from the earlier forecast of a 25 percent rise. The operating margin should increase to a level of up to 7.5 percent for the year, while the group previously forecast a level of about 7 percent.
Herbert Hainer said in a statement that the five-year strategy unveiled by the group last year, Creating the New, was rapidly gaining traction. He pointed to double-digit growth rates across all key regions and all major categories and was entirely confident that the global momentum of the group's brands would continue in the second half and beyond. The guidance upgrade came just days before Kasper Rorsted is due to join the Adidas Group's executive board at the start of August, although Hainer will remain in charge until the end of September.
