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Adidas Q2 revenues rise 21 percent, raises FY16 outlook

By Prachi Singh

29 Jul 2016

Business

Announcing preliminary results for the second quarter, the Adidas Group said group revenues increased 21 percent on a currency-neutral basis and 13 percent in euro terms to 4.4 billion euros (4.8 billion dollars). As a result of a higher gross margin as well as operating expense leverage, Group operating profit increased 77 percent to 414 million euros (458 million dollars).

“We are extremely pleased how well our brands are connecting with the consumer and how fast our new strategy has started to gain traction,” said Herbert Hainer, CEO of the Adidas Group, adding, “Double-digit growth rates across all key regions and all major categories is proof positive of the initial success of Creating the New. We have every confidence that the strong momentum our brands are enjoying around the globe will continue in the second half of 2016 and beyond.”

The company said that the positive impact from the early termination of the Chelsea F.C. contract, which lifted the Q2 other operating income by a mid-to high-double-digit million euro amount, also contributed to the improvement. Consequently, net income from continuing operations increased 99 percent to 291 million euros (322 million dollars). Basic earnings per share from continuing and discontinued operations amounted to 1.45 euros (1.61 dollars) in the quarter, reflecting a 100 percent increase over the prior year level.

Following the strong brand momentum, the Group has increased its 2016 financial outlook. Management now projects currency-neutral sales to grow at a rate in the high teens in 2016. As a result of the stronger than expected top-line development and further operating leverage, net income from continuing operations is now forecasted to increase at a rate between 35 percent and 39 percent to a level between 975 million euros (1,080 million dollars) and one billion euros (1.1 billion dollars) in 2016. The Group’s operating margin is now projected to increase to a level of up to 7.5 percent.

picture:adidas