Adidas continues growth sprint in Q2

File: Sales at the flagship Adidas brand were up four percent thanks to its "sport-inspired" streetwear.

File: Sales at the flagship Adidas brand were up four percent thanks to its "sport-inspired" streetwear.

AFP

BERLIN - German sportswear maker Adidas said its strong growth continued into the second quarter, seeing its biggest problems in overcoming bottlenecks in its supply chain.

The Bavarian group added 34 percent over April-June 2018, reaching 531 million euros ($595-million) to beat analysts' forecasts.

Revenues grew by 4.7 percent to 5.5 billion euros, making for an operating profit up 8.6 percent at 643 million euros.

Sales at the flagship Adidas brand were up four percent thanks to its "sport-inspired" streetwear, while its "performance" sportswear fell back in comparison with 2018's football World Cup-powered revenues.

Long-struggling American subsidiary Reebok returned to growth in sales in the second quarter, adding three percent thanks to its "classics" line.

Adidas' online direct sales business grew 37 percent, while in its different regions only China saw double-digit growth.

North America picked up the pace of sales expansion as the group managed to overcome supply bottlenecks for in-demand products, while sales in Europe held steady.

Adidas' closely-watched gross margin increased 1.2 percentage points, to 53.5 percent, a slower pace than in the previous quarter.

"Higher air freight costs to mitigate the supply chain shortages and a less favourable pricing mix" weighed on profitability, the group said.

"We remain confident about the sequential revenue acceleration in the second half of the year," chief executive Kasper Rorsted said in a statement.

Looking ahead, the group stuck to its 2019 forecasts for sales growth between five and eight percent, adjusted for currency effects.

Its gross margin should increase to 52 percent and net profit come in between 1.88 and 1.95 billion euros.

Source
AFP