Adidas hikes outlook despite hit to China sales

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Adidas said its confidence was underlined by the planned launch of products such as new versions of its popular NMD sneakers, as well as sports events like the Olympics and the start of the club soccer season in Europe.

Second-quarter sales soared 52% to 5.077 billion euros ($6.01 billion), while operating profit came in at 543 million euros, beating analysts’ average forecasts for 4.97 billion euros and 458 million euros respectively.

Adidas now expects 2021 sales to grow up to 20%, compared to a previous forecast for a “high-teens percentage rate”, and for net income from continuing operations to reach 1.4-1.5 billion euros, up from a previous 1.25-1.45 billion.

Currency-neutral sales almost doubled in North America and Europe, Middle East and North Africa in the quarter, but fell 16% in Greater China, in part because the region saw a strong recovery a year ago as it emerged from coronavirus lockdown.

Western brands including Adidas faced online attacks in China in late March over past statements saying they would not source cotton from Xinjiang after reports of human rights abuses against Uyghur Muslims. Beijing denies any such abuses.

Adidas said in May it had initially seen a steep drop in demand in China but sales had since recovered slowly but steadily. It did not comment on the tension on Thursday, beyond referring to the “geo-political situation”.

($1 = 0.8450 euros)