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GERMANY-ADIDAS-EARNINGS-LEISURE
Adidas scores profit boost with World Cup
FRANKFURT AM MAIN, Aug 9, 2018 (BSS/AFP) – Germany sporting goods firm
Adidas on Thursday said the World Cup in Russia and strong e-commerce sales
lifted net profit in the second quarter, keeping the company on track to meet
its 2018 goals.
Net profit at the Bavaria-based company more than doubled to 396 million
euros ($459 million) between April and June, up from 158 million the previous
year.
Group revenues climbed four percent to 5.3 billion euros year-on year,
powered by brisk demand in the key North American and Chinese markets as well
as by online sales.
A major growth driver in the second quarter was the World Cup football
extravaganza, which helped drive a double-digit increase in sales in Russia
alone.
As well as supplying the footballs, Adidas sponsored 12 of the 32 teams in
the tournament, allowing it to shrug off Germany’s embarrassingly early exit.
“We delivered another strong quarter on the back of a successful World Cup
activation,” said chief executive Kasper Rorsted in a statement.
The group also benefited from higher prices for “top-line” sportswear and
sneakers, which helped offset negative currency effects and marketing
spending linked to the World Cup.
But sales at the group’s struggling US sports subsidiary Reebok fell three
percent to 387 million euros, despite a major overhaul.
Adidas also said it had incurred a one-off charge related to Reebok, after
German financial regulators forced the group to make accounting changes to
its 2016 financial statement over the value of the Reebok trademark.
Adidas said it would take a retroactive hit “in the mid-triple digit
million euro range” from the impairment charge, but this would not impact the
company’s 2018 guidance.
Looking ahead to the full year, Adidas still expects a roughly 10-percent
increase in worldwide currency-adjusted sales, fuelled by North America and
Asia-Pacific.
Investors were impressed with Adidas’ performance, sending shares soaring
9.2 percent to 208.10 euros in early trading in Frankfurt, against a DAX
blue-chip index narrowly in the red.
BSS/AFP/HR/1330