Adidas on Wednesday raised its full-year guidance, citing a robust performance in the first nine months of the year.
The German activewear giant said net income from continuing operations is now expected to increase at a rate of between 16 and 20 percent in 2018, to between 1.66 billion euros ($1.91 billion) and 1.72 billion euros. This compares with a previous forecast of between 1.61 billion and 1.67 billion euros, representing an increase of between 13 and 17 percent.
Currency-neutral revenues in 2018 are projected to grow between 8 and 9 percent, below the previous forecast of around 10 percent, with lower-than-expected growth in Western Europe dragging on its performance.
The company’s gross margin is now projected to increase by up to 100 basis points to a level of up to 51.4 percent.
Adidas CEO Kasper Rorsted said top-line expansion in the third quarter was driven by double-digit increases across the company’s strategic growth areas: North America, greater China and e-commerce. “We achieved strong profitability improvements despite a significant increase in marketing investments and severe currency headwinds,” he said in a statement.
The company posted a net profit of 659 million euros in the third quarter, up 25 percent year-on-year.
Sales in the period rose 3 percent to 5.87 billion euros, compared with 5.67 billion in the same period last year, boosted by double-digit growth in America and the Asia-Pacific region, notably China. The company cited excellent double-digit growth in direct-to-consumer revenues, with strong support from e-commerce, where revenues grew 76 percent in the quarter.
Sales at Adidas rose 10 percent, driven by double-digit growth in the Sport Inspired category, as well as high-single-digit growth in Sport Performance. Revenues at Reebok fell 5 percent, impacted by declines in the Training and Running segment, Adidas said.
This story was reported by WWD and originally appeared on WWD.com.