Adidas exceeds analysts’ third quarter earnings and sales estimates for the fiscal year.
The German multinational has secured a new £1.13 billion credit facility.
Adidas forecasts an annualized sales decline of up to 5% for the fourth quarter.
Adidas (ETR: ADS) on Tuesday released financial results for the third quarter of the fiscal year that exceeded analysts’ earnings and sales estimates. So far this year, however, the company has seen declines on both fronts.
Adidas reported a decline of approximately 3% in pre-trade trading on Tuesday and dropped a further 3% in the next hour. The company’s shares are now down 3% on the stock market, having rallied 70% from their March low. Are you interested in investing in the stock market online? Here is a simple guide to help you get started.
Adidas’ financial results for the 3rd quarter compared to analysts’ estimates
Adidas reported third quarter net income of £486.92 million compared to £576.10 million in the prior year quarter. Operating profit for the third quarter was £708.9 million compared to £799.94 million in the prior year.
In terms of last quarter sales, the sporting goods company recorded £5.32 billion. This compares with turnover of £5.72 billion last year. Adidas recently appointed Amanda Rajkumar as Head of Human Resources.
According to FactSet, experts had predicted that Adidas would achieve sales of 5.30 billion pounds sterling in the third quarter. Their net profit and operating profit estimates were £470.42 million and £646.55 million respectively.
Adidas stated that its store opening rate had increased to 96% by the end of September. However, it recently slipped back down to 93%. In the previous quarter (Q2), adidas reported an operating loss of £296.97 million, according to the report released in the first week of August.
For the fourth quarter of the fiscal year, the Herzogenaurach-based company forecasts a decline in revenues of up to 5% on a currency-neutral basis on an annualized basis. Adidas expects its fourth quarter operating profit to be in the range of £89 million to £178 million.
Adidas secures a new £1.13 billion credit facility
In addition, Adidas secured a new £1.13 billion credit facility on Tuesday to help cushion the economic blow of the ongoing COVID 19 crisis, said CFO Harm Ohlmeyer:
“Achieving strong investment grade ratings, issuing bonds worth 1.5 billion Euro at favorable terms and securing a new syndicated loan of 1.5 billion Euro from our partner banks has significantly strengthened Adidas’ financial profile.
At the time of writing, Adidas is valued at £50.89 billion and has a price-to-earnings ratio of 101.70.