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What's in the Cards for Adidas (ADDYY) This Earnings Season?
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Adidas AG (ADDYY - Free Report) is slated to release third-quarter 2018 results on Nov 7. The question lingering in investors’ minds is whether this sporting goods behemoth will be able to deliver a positive earnings surprise in the quarter to be reported.
The company delivered a positive earnings surprise in the last reported quarter. In fact, it reported average earnings beat of 53.6% in the trailing four quarters. Let’s see how things are shaping up prior to this announcement.
The company’s Zacks Consensus Estimate for the quarter under review is pegged at $1.77 per share, reflecting year-over-year growth of roughly 12.7%. We noted that earnings estimates declined by a penny in the last 30 days. Further, Zacks Consensus Estimate for revenues is pegged at $7.06 billion, up about 5.9% from the year-ago quarter.
Shares of Adidas rose 8.7% in the last three months against the industry’s decline of 3.8%. The stock has been gaining from a positive earnings trend, with a beat recorded in the last six quarters. Strength in the Adidas brand, particularly in North America, is aiding the top line. Further, revenues in the second quarter benefited from double-digit growth in Sport Performance, driven by double-digit growth in the training, running and football categories as well as high-single-digit growth in Sport Inspired.
Moreover, the company has been gaining from solid e-commerce growth, which is contributing significantly to the top line.
Together these growth drivers, along with Adidas’ constant product launches and strong marketing initiatives, make us hopeful about the company’s prospects. However, unfavorable currency rates, as well as higher input costs, remain a threat to its performance.
The company expects strong top- and bottom-line growth in 2018. It anticipates currency-neutral sales to advance nearly 10% in 2018, with double-digit growth expected in North America and the Asia-Pacific regions. It envisions net income from continuing operations to improve 13-17% to €1.615-€1.675 billion. Let’s wait and see if Adidas can put up another impressive show this earnings season.
What the Zacks Model Unveils
Our proven model does not show that Adidas is likely to beat earnings estimates in the third quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The company’s Earnings ESP of -0.10%, combined with Zacks Rank #3, makes surprise prediction difficult.
Stocks With Favorable Combination
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Kohl’s Corp. (KSS - Free Report) has an Earnings ESP of +0.35% and a Zacks Rank #2.
L Brands Inc. has an Earnings ESP of +10.00% and a Zacks Rank #2.
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Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
What's in the Cards for Adidas (ADDYY) This Earnings Season?
Adidas AG (ADDYY - Free Report) is slated to release third-quarter 2018 results on Nov 7. The question lingering in investors’ minds is whether this sporting goods behemoth will be able to deliver a positive earnings surprise in the quarter to be reported.
The company delivered a positive earnings surprise in the last reported quarter. In fact, it reported average earnings beat of 53.6% in the trailing four quarters. Let’s see how things are shaping up prior to this announcement.
The company’s Zacks Consensus Estimate for the quarter under review is pegged at $1.77 per share, reflecting year-over-year growth of roughly 12.7%. We noted that earnings estimates declined by a penny in the last 30 days. Further, Zacks Consensus Estimate for revenues is pegged at $7.06 billion, up about 5.9% from the year-ago quarter.
Adidas AG Price and EPS Surprise
Adidas AG Price and EPS Surprise | Adidas AG Quote
Factors at Play
Shares of Adidas rose 8.7% in the last three months against the industry’s decline of 3.8%. The stock has been gaining from a positive earnings trend, with a beat recorded in the last six quarters. Strength in the Adidas brand, particularly in North America, is aiding the top line. Further, revenues in the second quarter benefited from double-digit growth in Sport Performance, driven by double-digit growth in the training, running and football categories as well as high-single-digit growth in Sport Inspired.
Moreover, the company has been gaining from solid e-commerce growth, which is contributing significantly to the top line.
Together these growth drivers, along with Adidas’ constant product launches and strong marketing initiatives, make us hopeful about the company’s prospects. However, unfavorable currency rates, as well as higher input costs, remain a threat to its performance.
The company expects strong top- and bottom-line growth in 2018. It anticipates currency-neutral sales to advance nearly 10% in 2018, with double-digit growth expected in North America and the Asia-Pacific regions. It envisions net income from continuing operations to improve 13-17% to €1.615-€1.675 billion. Let’s wait and see if Adidas can put up another impressive show this earnings season.
What the Zacks Model Unveils
Our proven model does not show that Adidas is likely to beat earnings estimates in the third quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The company’s Earnings ESP of -0.10%, combined with Zacks Rank #3, makes surprise prediction difficult.
Stocks With Favorable Combination
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Nordstrom Inc. (JWN - Free Report) has an Earnings ESP of +16.90% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kohl’s Corp. (KSS - Free Report) has an Earnings ESP of +0.35% and a Zacks Rank #2.
L Brands Inc. has an Earnings ESP of +10.00% and a Zacks Rank #2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>