Adidas AG raised its forecasts for 2015 and reported third-quarter earnings that topped analysts’ estimates as the German sportswear maker sold more sneakers in western Europe and China.
Advertisement
Net income from continuing operations excluding goodwill impairment is now projected to increase at a rate of around 10% compared to net income from continuing operations excluding goodwill impairment losses of Euro 642 million in 2014.
“The third-quarter numbers let Hainer gain a few more time”, said Cedric Rossi, an analyst at Bryan Garnier & Company in Paris.
Adidas’ global brand hasn’t suffered any damage as a result of its association with FIFA, even as several top worldwide soccer officials are under investigation for corruption, the German apparel company’s chief executive Herbert Hainer said Thursday.
Net Income: Net income grew 10.4 percent year-over-year, to 314 million euros, or $349 million, based on the average currency exchange rate for the period.
Sales growth was “driven by an accelerated momentum at Adidas as well as robust growth at both Reebok and TaylorMade-Adidas Golf”, the group explained.
“Thanks to our outstanding performance during the first nine months we are reaching the 2015 goal line much faster than we had anticipated”, he said. “Obviously, in the first quarter (of 2016), we will intensify our marketing support, supporting our key assets like James Harden and Erin Rogers with a big basketball campaign on the one hand, and Erin Rogers on the American football side”, he said.
When adjusted for currency fluctuations, Adidas’ North American sales were up 6.5% on the year, hitting EUR776 million.
Adidas said it would seek to build on its momentum by lifting promotional spending further in the fourth quarter. (Net income from continuing operations grew 20 percent, to 337 million euros, or $374 million).
Russia/CIS sales in the third quarter decreased by 7%, due to sales declines at both adidas and Reebok. Currency-neutral sales in North America are now expected to grow at a mid-single-digit rate (previously a low- to mid-single-digit rate).
“No matter what the outcome of the strategic review will be, we continue to press ahead with our far-reaching restructuring plan”, Hainer, 61, said on a call with reporters.
Advertisement
The adidas Group now expects currency-neutral sales to increase at a high-single-digit rate, up from its prior outlook of mid-single digit rate. It said it planned to increase pricing to balance out the negative impact from the increased material costs.
