Adidas raises full year profit outlook on strong Q3

German manufacturer and retailer of sports goods Adidas said on Wednesday its Q3 revenues increased 8 percent on a currency-neutral basis and 3 percent in euro terms. In the first nine months, revenues increased 9 percent on a currency-neutral basis, while in euro terms, revenues grew 3 percent to 16.682 billion euros.

The company’s sales in Q3 2018 were 5.873 billion euros, up from 5.677 billion euros a year earlier. Net income rose to 656 million euros. The profit margin of the company increased to 11.2 percent compared to 9.7 percent a year ago.

Adidas raises full year outlook

Due to the strong financial performance in the first nine months of 2018, Adidas added that the company has increased its profitability outlook for the year and specified the targeted range for its top-line growth. The company now projects currency-neutral revenues in 2018 to grow between 8 percent and 9 percent, at the lower end of the communicated range (previously: around 10 percent), due to lower-than-initially-expected growth in Western Europe. Adidas now forecasts net income from continuing operations to reach between 1.660 billion euros and 1.720 billion euros, reflecting an increase of between 16 percent and 20 percent compared to the prior-year level of 1.430 billion euros. The company previously expected increase of between 13 percent and 17 percent to between 1.615 billion euros and 1.675 billion euros.

The company now expects gross margin to increase up to 1 percentage points to a level of up to 51.4 percent compared to previous expectation of increase up to 0.3 percentage points to up to 50.7 percent. This, together with the projected top-line growth, is expected to drive an increase in operating profit of between 12 percent and 16 percent against previous range of increase between 9 percent and 13 percent. The operating margin is expected to improve by around 1percentage points to a level around 10.8 percent compared to previous outlook of increase between 0.5 and 0.7 percentage points to between 10.3 percent and 10.5 percent. Basic EPS from continuing operations is forecast to increase at a rate between 15 percent and 19 percent compared to previous estimate of increase between 12 percent and 16 percent.

Adidas AG was founded in 1949 by Adolf Dassler and is based in Herzogenaurach, Germany. Adidas today is a world's leading sportswear firm that annually produces over 900 million products. The company is known for its technologically advanced footwear and clothing range and its associations with leading sports personalities and events across the globe.

Offering men's and women's sports footwear and clothing, the Frankfurt-listed company has about 56,000 employees worldwide and operates more than 1500 stores.

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Picture:Adidas media centre