adidas, a leading sportswear and equipment brand, has reported an increase in net income from continuing operations by 19% to EUR 656 million in the third quarter of 2018. Revenues grew by 8% on a currency-neutral basis and 3% in euro terms to EUR 5.873 billion. The company’s gross margin increased by 1.4 percentage points to 51.8%. Operating profit was up by 13% in the quarter to a level of EUR 901 million, resulting in an operating margin improvement of 1.3 percentage points to a level of 15.3%.

Due to the strong financial performance in the first nine months of 2018, adidas has increased its profitability outlook for the year and specified the targeted range for its top-line growth. The company now projects currency-neutral revenues in 2018 to grow between 8% and 9%, at the lower end of the communicated range (previously: around 10%), due to lower-than-initially-expected growth in Western Europe.

At the same time, adidas now forecasts net income from continuing operations to reach between EUR 1,660 billion and EUR 1,720 billion, reflecting an increase of between 16% and 20% compared to the prior-year level of EUR 1,430 billion.

The company’s gross margin is now projected to increase up to 1.0 percentage points to a level of up to 51.4%. This, together with the projected top-line growth, is expected to drive an increase in operating profit of between 12% and 16% (previously: increase between 9% and 13%).

Consequently, the operating margin is expected to improve by around 1.0 percentage points to a level around 10.8%. Basic EPS from continuing operations is forecast to increase at a rate between 15% and 19%, compared to the prior-year level of EUR 7.05, excluding the negative one-time tax impact in 2017, not taking into account any decrease in the number of shares outstanding due to the company’s share buyback programme.

www.adidas-group.com