Adidas Group isn’t sweating the surge of activewear brands entering the market.
The Herzogenaurach, Germany-based athletic apparel and footwear giant posted preliminary results Wednesday that revealed group revenues rose 22 percent on a constant currency basis, or 17 percent in euro terms, to 4.8 billion euros (or $5.4 billion) in the first quarter of 2016.
Group operating profit increased 35 percent to 490 million euro ($554.66 million) during the period, which the company attributed to higher gross margin as well operating expense leverage. As a result, net income from continuing operations jumped 38 percent to 350 million euros ($396.1 million), while basic earnings per share amounted to 1.75 euros ($1.98). That’s a 50 percent increase over the year-ago level.
All in all, Adidas is pleased with its better-than-expected performance in the quarter and has boosted its 2016 financial outlook. Management now projects currency-neutral sales to grow at a rate of around 15 percent in 2016, compared with its previous guidance of 10-12 percent.
The company also expects to continue to generate operating leverage throughout the remainder of the year, to the tune of a 15-18 percent increase in net income, versus its prior projection of between 10-12 percent.
Adidas said it will provide further details on the improved outlook when it publishes its official quarterly results on May 4. Shares were up 8.96% as of 10:00 a.m. EDT.