27 Apr Adidas Raises 2016 Guidance Again
Adidas Group raised its guidance for 2016 for the second time in three months on a leap in first-quarter earnings. Adidas said it now expects currency-adjusted sales in 2016 to grow at a rate of about 15 percent and net profit at between 15 percent and 18 percent.
Adidas revenues in the quarter increased 22 percent on a currency-neutral basis and 17 percent in euro terms to €4.8 billion.
As a result of a higher gross margin as well as operating expense leverage, Group operating profit increased 35 percent to €490 million in the first quarter of 2016 (2015: €363 million excluding goodwill impairment losses). Consequently, net income from continuing operations increased 38 percent to €350 million (2015: €255 million excluding goodwill impairment losses). Basic earnings per share from continuing and discontinued operations amounted to €1.75 in the quarter, reflecting a 50 percent increase over the prior year level (2015: €1.17 excluding goodwill impairment losses).
In light of the strong brand momentum, which is reflected in the better than expected first quarter performance, the Group has increased its 2016 financial outlook.
Management now projects currency-neutral sales to grow at a rate of around 15 percent in 2016 (previously: increase by between 10 percent and 12 percent). Furthermore, the company expects to continue to generate operating leverage throughout the remainder of the year. As a result, net income from continuing operations is now forecasted to grow at a faster rate than the top line and increase between 15 percent and 18 percent in 2016 (previously: increase by between 10 percent and 12 percent).
More details on the improved outlook will be given with the publication of the quarterly results on May 4.