Adidas Posted Growth in the First Quarter
Adidas posted strong growth in the first quarter. Revenues rose by 20 percent to just under 5.3 billion euros, as reported by the Herzogenaurach-based company. Adjusted for currency effects, the increase was 27 percent. The group benefited from strong growth in China.
Profitability also improved significantly after the corona pandemic had weighed heavily for the first time in the previous year. The operating result rose from 48 million to 704 million euros. The bottom line was that 502 million euros remained in continued business, after 26 million euros in the previous year.
The US subsidiary Reebok, which is up for sale, is no longer included in the figures. The numbers were above analysts’ expectations.
Adidas is a bit more optimistic after the strong first quarter. The group now expects a currency-adjusted increase in sales in the high tens of percent range and thus the upper end of its previous forecast. So far, in the worst case scenario, this has seen an increase in the mid-ten percent range.
For the second quarter, Adidas sees a significant acceleration in growth and expects a currency-adjusted increase in sales of around 50 percent.
One of the growth drivers will continue to be China, said Rorsted. Although he admitted that there was a “weakening of the recovery” in the region in April, he expects strong growth for the current year. Most recently, there were calls to boycott Western brands on social media in China due to human rights criticism – including Puma, Adidas and Nike. Puma boss Bjorn Gulden said when the figures for the first quarter were presented that the deteriorating relations with China had put a strain on business from March onwards.
The group confirmed the earnings forecast. The current logistics problems, such as higher freight costs and a tense situation in freight capacities, had a negative impact. In addition, there would be higher raw material prices. The bottom line is that the management continues to calculate with an increase to 1.25 to 1.45 billion euros in the continued business.