adidas Group: Mixed H1 results (in line with our estimates), H2 will be clearly more favourable!
BUY, Fair Value EUR95 (+11%)
This morning adidas Group unveiled H1 13 results. FX-neutral sales remained flat in Q2 like in Q1, still impacted by a challenging comparison base (Q2 12: +7%). Q2 OP margin only increased 10bp to 7.4%, which is bang in line with our estimate but a bit below consensus (7.6%). The deceleration vs. Q1 (+110bp) is explained by the group’s strategy to increase marketing expenses and to expand the Retail network. The group slightly revised down its FY13 sales guidance (“low to mid-single digit increase vs. MSD previously, BG: +4.1%e) but it also raised its FY13 GM target (48.5-49% vs. 48-48.5% initially).We recommend to take advantage of any negative market reaction as we anticipate an acceleration in sales growth in H2 (+7.4% vs. flat in H1) and in OP margin improvement (H2: +120bp vs. +60bp in H1). Conference call today at 3pm (CET).
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