Adidas increases full-year outlook as pandemic recovery kicks off

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Adidas has raised its full-year outlook as revenues in the EMEA and North American markets almost doubled in the brand’s second quarter following a challenging pandemic period.

Net income from continuing operations increased by more than €600m (£510m) in the second quarter to reach €387m. This marked a stark increase from the loss of €295m reported in the same period last year.

The German sportswear brand reported that currency-neutral sales rose by 55%, an increase that was credited to a “strong recovery” in physical retail sales following the easing of restrictions in some nations. Both wholesale and own-retail revenues rose at a high-double-digit rate, according to the company.

In contrast, ecommerce sales fell by 14% compared to the same period last year, when Adidas reported digital revenue increases of almost 50%.

Adidas now expects currency-neutral sales to increase at a rate of up to 20% year-on-year, as well as a sales growth of up to 7% in the second half of the year compared to 2020 levels.

Overall, revenues in Q2 grew 51% to €5.07bn. EMEA and North America were particularly strong markets, with sales almost doubling compared to 2020. The sports brand recorded a rise in revenue across all market segments bar Greater China, where the brand faced calls for a boycott online due to its stance on sourcing cotton from Xinjiang.

The raised outlook is also attributed to a flurry of product launches in the coming months, although Adidas did acknowledge that the company continues to be “impacted by Covid-19-related lockdowns, industry-wide supply chain challenges and the geo-political situation”.

Adidas chief executive Kasper Rorsted said: “Sales in our strategic growth markets EMEA and North America almost doubled. Revenues in our key categories Football and Outdoor even grew at triple-digit rates. The share of full-price sales increased strongly, fuelling exceptional profitability improvements. This momentum gives us all the confidence to increase our full-year outlook despite the external challenges that our industry continues to face.”

Following the publication of the results, Adidas’ shares fell as its growth paled in comparison with the Q2 results of rivals Nike and fellow German brand Puma, both of which reported that overall sales almost doubled in recent financial reporting periods.