Adidas raises sales outlook after Q1 sales hit €5.3bn
Increase in demand would be led by new products and upcoming sporting events, says Adidas
Sportswear brand Adidas raised its sales forecast for the year, with expectations that upcoming sporting events will boost demand for new products.
The German company said it now sees sales growing at a high-teens percentage rate in 2021, compared with a previous forecast of mid-to-high teens growth.
It expects a rise of around 50% in the second quarter, taking into account the impact of prolonged lockdowns in Europe and supply chain challenges.
Adidas said the increase in demand would be led by new products such as its recyclable Ultraboost running shoes as well as big sports events like the European soccer championship and the Copa America.
Brands including Adidas, Nike and Puma saw online scrutiny in China earlier this year over previous statements saying they would not source cotton from Xinjiang after allegations of human rights abuses against Uyghur Muslims, which Beijing has denied.
However, despite that, sales rose 156% in greater China in the first quarter, a year after the pandemic hit there.
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Adidas has previously said that it has a “zero tolerance approach to slavery and human trafficking”. Although, it did not specifically refer to the Xinjiang issue in the latest earnings release.
Adidas reported first quarter sales rose 20% to €5.268bn ($6.35bn, £4.5bn), beating analysts’ average forecast of €5bn, while net income from continuing operations rose to €502m ($606m), compared with €26m for the same period from a year earlier.
The company kept its forecast for 2021 that net income from continuing operations would rise between €1.25bn-€1.45bn ($1.5bn-$1.75bn).
At the end of the first quarter, 89% of the company’s stores had reopened globally.
Shares in Adidas, which had fallen in recent weeks on concerns about sales in China, were up 7% at 07:28 GMT.