PARIS — Adidas AG lifted its guidance for 2016 after reporting a strong second quarter that widely beat financial analysts’ consensus.
The German sporting goods-maker released preliminary results on Thursday for the three-month period ended June 30. It said net income from continuing operations increased 99 percent to 291 million euros, or $327.2 million, while group operating profit gained 77 percent to 414 million euros, or $465.5 million, lifted by the early termination in May of its sponsorship of Chelsea Football Club.
Group revenues in the quarter totaled 4.4 billion euros, or $4.95 billion, up 13 percent in reported terms and 21 percent on a constant-exchange basis.
Dollar figures are calculated at average exchange for the period to which they refer.
In a research note, UBS analyst Fred Speirs said Adidas’ second-quarter operating profit was a 25 percent beat against consensus, due to the higher-than-expected organic sales growth and a higher gross margin. Added to that, the early end of the Chelsea contract resulted in a mid- to high-double-digit million-euro benefit, versus the former guidance that factored in a boost in the mid-double-digit million-euro range.
Adidas said due to the strong quarterly momentum, it has raised its outlook again for 2016. The company’s net income from continuing operations should increase between 35 percent and 39 percent, up from a previous guidance of around 25 percent, and operating margin is projected to increase up to 7.5 percent, versus a former projection of about 7 percent.
Sales in currency-neutral terms are expected to grow in the high teens, against a prior forecast of about 15 percent.
Adidas said it will provide more details on the yearly outlook on Aug. 4, when its finalized quarterly figures are published.
The company stock bounced after its numbers were published on Thursday. By 1 p.m. CET, it was trading up 4 percent at 146.23 euros, or $162.06 at current exchange.
UBS expects investors are also reacting positively to Adidas’ probable inclusion in the Euro Stoxx 50 index at the end of August.