INTERNATIONAL - Adidas revenue and profits rose again during the second quarter of 2018, according to earnings figures published on Thursday by the German sportswear manufacturer.
Adidas chief executive Kasper Rorsted said: "We delivered another strong quarter on the back of a successful World Cup activation. Our profitable growth was once again driven by our strategic focus areas North America, Greater China and e-commerce, while we continued to invest into the desirability of our brands and the scalability of our business".
Gross revenue at the Herzogenaurach-based company was measured at 5.3 billion euros $6.1 billion (R87bn) in the second quarter, marking a 4 percent increase from the same period last year. Operating profit was recorded at 592 million euros (plus 17 percent), while net profits from continuing operations came in at 418 million euros (plus 20 percent).
The sportswear manufacturer emphasized that quarterly increases in revenue had been achieved in spite of headwinds created by the recent appreciation of the euro. Once adjusted for currency effects, the second quarter revenue would have grown at an even faster pace of 10 percent.
Aside from booming e-Commerce revenue (plus 26 percent), Adidas further highlighted that the combined sales of its Adidas and Reebok brands grew particularly strongly in North America (plus 16 percent) and Asia-Pacific (plus 19 percent).
Although quarterly marketing costs soared by 14 percent due to the recent FIFA football world cup, the company's gross margin still rose slightly to 52.3 percent (2017: 50.1 percent) in the second quarter. Adidas attributed the development to an improved pricing and channel mix, reflecting its focus on the quality of its top-line growth.
Adidas confirmed an earlier forecast on Thursday for currency-adjusted sales in 2018 to increase at a rate of around 10 percent, largely thanks to double-digit growth in North America and Asia-Pacific. The company's gross margin is hereby predicted to increase up to 0.3 percentage points to a level of up to 50.7 percent.
Adidas is Europe's largest and the world's second largest sportswear producer, recording total annual revenue of 21.2 billion euros in 2017. The 93-year old company is publicly-listed on the DAX stock exchange in Frankfurt.
"With these results, we remain firmly on track to achieve our set targets for the full year 2018 and long-term until 2020,” said Rorsted.