By Giulia Petroni
Adidas AG said Friday that profit rose in the first quarter as performance improved across all market segments, and updated its outlook for the full year, guiding for higher sales.
The German sporting-goods company said quarterly net profit was 558 million euros ($673.2 million) from EUR31 million a year earlier.
Sales increased 20% to EUR5.27 billion, driven by solid results in direct-to-consumer revenue and strong e-commerce.
Adidas said it now expects currency-neutral sales to increase by around 50% in the second quarter and at a high-teens rate in 2021.
The company also backed previous guidance for the full year. Its gross margin is expected at around 52%, while the operating margin is expected to increase to between 9% and 10%. Net income from continuing operations is seen at EUR1.25 billion-EUR1.45 billion.
Adidas added that its profitability outlook will temporarily include stranded costs associated with the divestiture of Reebok. In the full year, these costs are expected to amount to around EUR250 million at the operating profit level and should negatively affect net income from continuing operations by around EUR200 million, it said. Only around 30% of the EUR250 million will reoccur in 2022, while in 2023 the stranded costs will be eliminated.
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