German sportswear brand Adidas on Thursday bumped up its earnings outlook for the year, as it expects the Olympics and the upcoming European and American football seasons to boost its sales.
The Bavaria-based group recorded a net profit of €397 million between April and June, as pandemic restrictions eased and the football European Championships got going.
Its bottom-line was decisively up on the same period last year, when temporary shop closures in much of the world because of the COVID-19 pandemic left the group with a €295 million loss.
Adidas now expects sales for the year to increase by 20 per cent across the board and for net profit to touch between €1.4 and €1.5 billion.
The optimistic prediction was made despite “COVID-19-related lockdowns, industry-wide supply chain challenges and the geo-political situation”, Adidas said in a statement. “Driven by the strength of our brand and better-than-expected demand for our products, we saw an acceleration in our top- and bottom-line,” Adidas CEO Kasper Rorsted said in a press release. “This momentum gives us all the confidence to increase our full-year outlook despite the external challenges that our industry continues to face.”
The group saw improved sales in all regions except China, which dipped by 16 per cent compared with the same three-month period, although the company said the drop reflected a strong recovery in the second quarter last year. By contrast, in Europe and North America, sales were up year on year by 99 per cent and 87 per cent, respectively.
In Europe and North America, sales were up year on year by 99% and 87%, respectively
Adidas said it expected an acceleration in sales in the second half of the year “fuelled by an array of innovative product releases” and major sports events like the current Olympic games in Tokyo and the start of the American football and European club football seasons.
The company will continue to carry the costs from its intended sale of the Reebok, announced in February as part of a five-year turnaround plan, with €200 million set aside for the cost of divesting from the brand.