AD-HOC: adidas Group announces preliminary results and increases 2016 financial outlook
The adidas Group today announced preliminary results for the second quarter of 2016.
Group revenues increased 21% on a currency-neutral basis and 13% in euro terms to € 4.4 billion. As a result of a higher gross margin as well as operating expense leverage, Group operating profit increased 77% to € 414 million in the second quarter of 2016 (2015: € 234 million). The positive impact from the early termination of the Chelsea F.C. contract, which lifted the Q2 other operating income by a mid- to high-double-digit million euro amount, also contributed to the improvement. Consequently, net income from continuing operations increased 99% to € 291 million (2015: € 146 million). Basic earnings per share from continuing and discontinued operations amounted to € 1.45 in the quarter, reflecting a 100% increase over the prior year level (2015: € 0.73).
In light of the strong brand momentum, the Group has increased its 2016 financial outlook. Management now projects currency-neutral sales to grow at a rate in the high teens in 2016 (previously: increase by around 15%). As a result of the stronger than expected top-line development and further operating leverage, net income from continuing operations is now forecasted to increase at a rate between 35% and 39% to a level between € 975 million and € 1.0 billion in 2016 (previously: increase by around 25%). The Group’s operating margin is now projected to increase to a level of up to 7.5% in 2016 (previously: increase to a level of around 7.0%). More details on the improved outlook will be given with the publication of the quarterly results on August 4.