FRANKFURT AM MAIN, Aug 8 — German sportswear maker Adidas said today its strong growth continued into the second quarter, seeing its biggest problems in overcoming bottlenecks in its supply chain.
The Bavarian group added 34 per cent over April-June 2018, reaching €531 million (RM2.5 billion) to beat analysts’ forecasts.
Revenues grew by 4.7 per cent to €5.5 billion, making for an operating profit up 8.6 per cent at €643 million.
Sales at the flagship Adidas brand were up four per cent 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 3 per cent thanks to its “classics” line.
Adidas’ online direct sales business grew 37 per cent, 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 pe centage points, to 53.5 per cent, 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 5 and 8 per cent, adjusted for currency effects.
Its gross margin should increase to 52 per cent and net profit come in between €1.88 and €1.95 billion. — AFP
