Adidas Boosts Guidance on Robust Nine-Month Performance

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.

imbox Sponsored

Customer Experience, Revenue Stream and Sustainability Come Wrapped in an IMBOX

Sustainable, footwear protection technology company, IMBOX Protection, is bringing its in-store service to the U.S. market for increased foot traffic and basket size with a new revenue stream.
Learn More

Access exclusive content