Adidas Group (ADDDF.PK,ADDYY.PK) provided preliminary first quarter figures which are materially above market expectations.
Due to lower financial expenses and a lower tax rate, the group's net income attributable to shareholders was up 38% to 289 million euros from the prior-year quarter.
Group revenues grew 14% on a currency-neutral basis, or 17% in euro terms, to 3.8 billion euros from a year ago. Growth rates in Greater China and Japan as well as at TaylorMade-adidas Golf were stronger than originally anticipated.
In addition, the company announced that commercial irregularities discovered at Reebok India Company, in India, will likely affect the consolidated financial statements of the adidas Group. The currently estimated maximum negative impact could be up to a pre-tax amount of 125 million euros. Due to the sensitivity of the on-going investigation, specific details will be disclosed as appropriate in due course. As these irregularities have been deemed to have occurred prior to the 2012 financial year, the adidas Group might have to restate prior-year consolidated financial statements in line with the requirements of IAS 8. The financial statements of adidas AG will not be affected by this issue.
Taking into account the stronger than expected first quarter financial performance, the continuing strong momentum of the Group's brands in key markets, as well as the impacts from potential one-time charges for 2012, the company is updating its financial forecasts for the full year accordingly.
Group sales for the full year are now expected to grow at a rate approaching 10% on a currency-neutral basis, compared to the previously issued forecast of mid- to high-single-digit. Net income attributable to shareholders is currently expected to increase at a rate between 12% and 17% versus the earlier outlook between 10% and 15%.
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by RTT Staff Writer
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