Adidas Raises Forecast For '11 After Posting Increases In Profit, Sales
adidas today "raised its forecast for 2011 after profit and sales increased in the first half, driven by growth in China and European emerging markets," according to Neetha Mahadevan of the WALL STREET JOURNAL. adidas said that net profit for the quarter ended June 30 rose 11% to $199.6M (all figures U.S.) from $179.6M a year earlier. Sales increased 5% to $4.36B, "missing analysts' expectations" of $4.39B due to currency effects. On a "currency-neutral basis, they rose 10%." adidas said that it now expects sales for this year to "increase 10% on a currency-neutral basis, while net profit is expected in the range" of $930-975M for '11. The company previously "expected sales to increase at a high single-digit rate." adidas expects earnings per share to increase to between $4.42-4.45, up from its previous forecast of $4.25-4.45, and a "gross margin of 47.5% to 48% compared with 47.8% in 2010." Still, the company said that it "expects the positive effects of a strong retail segment and the Reebok brand on the gross margin to be offset by a rise in sourcing costs due to higher raw-material prices and capacity constraints" (WSJ.com, 8/4).