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Adidas (A3 Neg/A- Neg) Earnings Upgrade

CONSUMER CYCLICALS

Adidas is having a year of upgrades, curve always has and continues to trade perennially tight, a new issue to refi the €500m Sept line might make things more interesting. Ratings should be stabilised (our view sine 1Q results/upgrade).


  • 2Q sales increased constant currency (cc) +11% (ex. Yeezy drag +16%) to €5.8b.
  • Gross margin was 50.8% (vs. 50.9% last yr), EBIT was €346m (5.9% margin) a near doubling yoy.
  • Yeezy actually contributed +€50m to EBIT but guidance is still for remaining inventory (€150m worth) to be sold at cost.
  • FY guidance has been bumped to cc revenues growth in HSD (prev. MSD to HSD, c9.7%) and EBIT to reach ~€1b (prev. €700m, c€1.1b)
Presser here.

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