Adidas AG (ADDYY) posted solid second quarter earnings and lifted its full-year guidance Thursday as the sportswear group continues its drive to grow online sales and grow sales in key markets faster than U.S. rival Nike Inc. (NKE) - Get Report.
Adidas posted operating profit of €505 million for the three months ending in June, the company said, an 18% increase from the same period last year. Sales for the quarter were tabbed at €5.038 billion, Adidas said, up 18% from last year and topping the FactSet consensus of €4.96 billion. Adidas also reiterated its improved full-year forecasts, with the group now expecting currency-neutral sales of between 17% and 19% and a 0.8 percentage point improvement in gross margins to 50%. Net income from continuing operations is also expected to increase "at a rate between 26% and 28%", the company said.
We are pleased to report on another very successful quarter," said CEO Kasper Rorsted. "Both sales and net income from continuing operations increased strongly. This is testament to the continued momentum our brands enjoy across our key regions and channels."
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"Based on the strong first half performance, we are raising our full-year guidance. We'll grow both our top and our bottom line faster than originally anticipated," he added
North American sales grew 29% to €1.014 billion, Adidas said, with the bulk of that total (€915 million) coming from Adidas-branded merchandise. That lifted gross profits in the region 37% to €420 million. Nike's total U.S. sales in its last fiscal quarter, which ended on May 31, were flat compared to the comparable period last year at $3.753 billion.
Adidas said its China sales grew 26% to €865 million, essentially matching Nike's $1.087 billion in fiscal fourth quarter sales, which were 11% higher from the same period last year.
Adidas shares were marked 1.56% lower at €188.61 each in Frankfurt Thursday, trimming their year-to-date gain to around 26%, outpacing the 17.6% advance for Nike.
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