Herzogenaurach, Germany — Sporting goods company Adidas saw currency neutral revenue increase by 18% and gross margin fractionally under 50% in the first half of 2017.
‘Both sales and net income from continuing operations increased strongly. This is testament to the continued momentum our brands enjoy across our key regions and channels,’ said CEO Kasper Rorsted.
In the first half of the year revenues reached EUR 10.5 bn compared to EUR 8.8bn in the first half of 2016, the firm said. Gross margin improved to 49.9%, reflecting the positive effects from improved pricing, product and channel mix as well as lower input costs which were largely offset by unfavourable currency developments.
The company said that due to the strong financial performance in the first half it was upgrading the 2017 financial outlook and now expects sales to increase between 17 and 19% up from 12 to 14% on a currency neutral basis in 2017. It’s also revised up the gross margin expectation to 50% and expects its other operating expenses as a percentage of sales to be below the prior-year level of 42.7%.
Sales grew fastest in North America where, in the first half of 2017 they were up by 32% to EUR 2 bn compared to EUR 1.5 bn in the first half of 2016. Greater China sales grew 28% to EUR 1.9 bn compared to EUR 1.4 bn in the first half of 2016.
Overall sales for the Adidas brand in the half were EUR 9.3 bn compared to EUR 7.7 bn in the first half of 2016, an increase of 20.7%.