Adidas raises forecast as second quarter revenue increases 55% – WWD

Adidas said Thursday it would double its purchases of innovative shoes and clothing for running, football, outdoor and training – and is optimistic that people will return to the office this fall.

“Casual wear has taken a very prominent position in the way people dress,” Managing Director Kasper Rørsted told reporters on Thursday after Adidas released strong second quarter figures and increased its sales forecast. and profits.

Amid improving conditions in some markets – and despite challenges in the global supply chain – Adidas said 2021 revenue is expected to increase by 20% thanks to key product launches, including the reintroduction of its NMD franchise. Previously, he had predicted year-round growth in teens.

The group now expects a net profit of 1.4 billion to 1.5 billion euros against previous forecasts of 1.25 billion to 1.45 billion euros.

Adidas said it factored factory closures in Vietnam, port congestion and high shipping costs into its calculations.

Second-quarter revenues grew 55% in currency neutral terms to € 5.08 billion, driven by all geographies except Greater China, where tensions over the country’s cotton supply. Xinjiang led to the boycott of certain brands, including Adidas.

The company said sales jumped 87% in North America and 99% in EMEA in the second quarter compared to the previous year quarter. Compared to 2019, sales in both regions increased by 15%.

Revenues in Latin America more than tripled, up 230%, while Asia-Pacific increased 66%. Adidas cited “prolonged lockdowns” in the Asia-Pacific region as one of the factors behind the relatively modest gains. Second quarter counts were 10% lower than 2019 levels.

“In Greater China, the company experienced a steady business recovery as well as sequential sales improvements throughout the quarter. Nonetheless, Greater China revenues declined 16% over the three-month period, ”the company noted.

Adidas also recorded profits, posting net income from continuing operations of 387 million euros, compared to a loss of 243 million euros in the previous year quarter.

As reported, the group plans to divest the Reebok brand, so all income and expenses from the Reebok business are recognized as discontinued operations as of the first quarter.

During the call with reporters, chief financial officer Harm Ohlmeyer said Adidas hopes to secure a deal “by the end of the summer.” He cited “very strong interest” from investors, but declined to say whether the final candidates were financial or strategic buyers.

Reebok sales reached 94% in the second quarter compared to a year ago and 13% above 2019 levels, Adidas noted.

Rørsted hailed the return of big sporting events, noting that more than 20 Adidas athletes at the Tokyo 2020 Summer Olympics have already won gold, including Alexander Zverev, Katie Ledecky and Jonathan Brownlee wearing his Adizero Adios Pro .

In addition, Adidas sponsored teams from Great Britain and Germany are performing well and showcasing their performance products to a global audience.

In the second quarter, revenues in the soccer and outdoor categories increased at triple-digit rates. Rørsted noted that Adidas will either quit or focus on sports such as lacrosse.

During the call, Rørsted revealed that Rupert Campbell will become president of Adidas North America effective January 1. He succeeds Zion Armstrong, who decided to leave the company at the end of this year to reunite with his family in New Zealand.

Campbell has been with Adidas since 2012 and recently made strong market gains as Managing Director of Adidas in Russia / CIS.

Rørsted said Adidas will lead its business with product innovations and global campaigns, leveraging sporting events and its digital capabilities.

On the sneaker front, Adidas has said it will “significantly” expand its Futurecraft 4D portfolio with the introduction of the 4D FWD Pulse; evolve its ZX franchise with the new ZX 5K Boost and quadruple the size of its high-end Forum franchise through “several iterations as well as dedicated marketing activities”.

Rørsted couldn’t help but call his new NMD S1, which is very different from the model first introduced in 2015, “a super cool shoe”.

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