Adidas hikes outlook as fatter margins boost second-quarter profit

Adidas AG raised its full-year outlook after improving margins helped the German sportswear maker to achieve an 18 percent jump in second-quarter operating profit.

Adidas said its operating profit rose to 505 million euros (450.78 million pounds), from 429 million euros a year earlier.
The operating profit improvement was driven by a higher gross margin, the company said.

Adidas now projects 2017 currency-neutral sales to grow at a rate between 17 percent and 19 percent, against a previous forecast for 12-14 percent, and for the gross margin to improve during the second half of 2017.

As a result, net income from continuing operations is now forecasted at a level between 1.360 billion euros and 1.390 billion euros, against previous guidance of 1.2-1.225 billion.

This is a clear raising of the bar, following Adidas'excellent second quarter results. Over the three months ended June, Adidas recorded a 20% increase in sales (+ 19% at constant exchange rates) to 5 billion euros. Its operating profit increased by 18% to 505 million euros. Net income from operations increased by 16% over the quarter to € 347 million.

The group will detail its quarterly results on 3 August.

With additional reporting from Fashion Network