Adidas Boosts FY Outlook On Strong Preliminary Q2 Results

(RTTNews) - adidas (ADDYY.PK) announced preliminary second quarter results and increased its 2017 financial outlook citing the strong first half year performance.

The company reported that preliminary revenues from continuing operations improved 19 percent on a currency-neutral basis and 20 percent in euro terms to EUR 5.0 billion. Net income from continuing operations increased 16% to EUR 347 million during the quarter from EUR 301 million in the year-ago quarter.

The company's operating profit rose 18 percent to EUR 505 million from last year period's EUR 429 million despite the one-time gain of around EUR 70 million related to the early termination of the Chelsea FC sponsorship that was included in the prior year's quarter. The operating profit improvement was driven by a higher gross margin as well as operating expense leverage.

The company's results from TaylorMade, Adams Golf, Ashworth and CCM Hockey brands are reported as discontinued operations as previously announced.

Looking ahead, adidas now projects currency-neutral sales to grow at a rate 17 percent to 19 percent in 2017, versus prior outlook of 12 percent to 14 percent growth compared to the adjusted 2016 net sales of EUR 18.483 billion for continuing operations.

Furthermore, the company forecast a year-over-year gross margin improvement during the second half of 2017 and expects to continue to generate operating leverage throughout the remainder of the year.

As a result, the company raised its growth target for net income from continuing operations to be at a rate of 26 percent to 28 percent in 2017 to a level of EUR 1.360 billion to EUR 1.390 billion, versus original guidance as provided in March of an increase of 13 percent to 15 percent to a level EUR 1.200 billion to EUR 1.225 billion.

adidas will publish its quarterly results on August 3.