German sports gear maker Adidas is looking to the Rio Olympics to take its sponsorship baton in a year when big sporting events have already boosted business significantly.
Sales at the group’s core brand leapt 25 percent in the second quarter thanks to events including the Euro 2016 football tournament.
Higher sales of items branded with the Bavarian firm’s famous three stripes were “mostly due to two-digit increases in the important categories of running, football and training, as well as Adidas Originals and Adidas neo,” two fashion branches, the firm said in a statement.
The Olympic games would be a “broad window” for Adidas to show off its different brands and technologies, chief executive Herbert Hainer said from Rio in a conference call on Thursday.
“We now expect to be able to compensate almost all of the severe headwinds we will be facing this year,” including unfavourable exchange rates and high labour and materials costs, Hainer said.
While the final in Paris pitted two Nike-sponsored teams, France and Portugal, against one another, Adidas markings were visible on other strong performers including Germany and Spain.
Following the boost from Euro 2016, Adidas-sponsored athletes and teams will be in the spotlight again at the Rio Olympics from August 6.
– Buyer sought for TaylorMade –
Adidas saw double-digit sales growth in several global markets in the second quarter, with a 32 percent gain in north America and 30 percent each in western Europe and China.
Sales grew more slowly in Russia and the Commonwealth of Independent States at just five percent — slightly allaying fears of a blow to the brand from Russia’s economic slowdown.
Across the whole group, revenues soared between April and June by 13 percent to 4.4 billion euros ($4.9 billion), Adidas reported in preliminary results released at the end of July.
Adidas doubled its net profits over the same period in 2015 to 291 million euros.
The strong result in the second quarter was partly down to Adidas agreeing to end its sponsorship of London football club Chelsea early in summer 2017, bringing in an estimated 50 to 100 million euros.
Two of the Adidas group’s other brands, Reebok and golf supplier TaylorMade, each reported seven percent growth in the second quarter.
Adidas announced in May that it would “actively seek a buyer” for TaylorMade as it suffered poor performance — preferring instead to focus on its own Adidas Golf marque.
It was Hainer’s last financial statement as boss of Adidas after 15 years at the helm, making him the longest-serving head of a large German firm.
He will step down in favour of Dane Kasper Rorsted on October 1.
The results did little to help Adidas shares in trading on Thursday.
Stock prices touched 4.0 percent losses in the morning before recovering slightly by early afternoon to -2.8 percent at 1345 GMT — making the group the second-worst performer on the DAX index of leading German companies. – Agence France-Presse