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Adidas shares rise amid stronger-than-expected Q2 profits

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Adidas shares are firmly in positive territory Thursday, after the German-based sports brand reported a stronger-than-expected second quarter performance. The brand’s CEO also said that as product cycles begin to shorten, they’re working hard to remain a popular choice for changing consumer tastes.

By 1445 BST, Adidas shares were 9.79% higher at €209.20. The stock has been broadly stable in recent weeks.

Adidas Q2 earnings

In its Q2 earnings report, Adidas said while revenues grew 10%, net profits surged 20% to €418 million. It also said its basic EPS was 20% higher at €2.06.

“We delivered another strong quarter on the back of a successful World Cup activation,” said Adidas CEO Kasper Rorsted.

“Our profitable growth was once again driven by our strategic focus areas North America, Greater China and e-commerce, while we continued to invest into the desirability of our brands and the scalability of our business,” Rorsted added.

The popular brand’s CEO also said that the business remains “firmly on track to achieve our set targets for the full year 2018 and long-term until 2020.”

The outlook for 2018 includes:

  • Sales growth of 10%.
  • Double-digit sales growth in the US and Asia-Pacific.
  • Net income of between €1. 1.615 billion and €1.675 billion.

Shorter product lifecycles

Speaking on CNBC earlier Thursday, Rorsted commented that the company has become aware of shorter life-cycles of different products.

“You are seeing shorter product lifecycles now so the consumer is becoming more fickle. He or she will look upon a product or cycle for six or nine months and they will change,” Rorsted told the news channel.

“That's on one side an opportunity, but also a threat because you can be in one day and you can be out on the next,” he said.

Rorsted added that right now, there’s been a notable increase in the popularity of the older 1990’s retro styles.

“The newest trend you are seeing in the high street is the mock-ups or the new models from what we had in the '90s, so the big clunky shoes are now coming in — which aren't for everybody's taste, but that's the new taste,” the Adidas CEO said.

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