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Adidas Sells CCM Hockey For $110 Million, Raises Forecast

Adidas Sells CCM Hockey For $110 Million, Raises Forecast
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Adidas AG (ADR) (OTC: ADDYY) announced its preliminary second-quarter results on Thursday and has raised its guidance for the rest of 2017.

Sales of the surging German sportswear company increased 19 percent on a currency neutral basis to 5 billion euros in the quarter. Operating profits increased 18 percent in the quarter, leading company management to raise its financial outlook for the current fiscal year.

Following the preliminary results, Adidas' management raised its currency-neutral sales to growth expectations to a 17–19 percent rate in 2017, up from 12–14 percent previously.

One-year gross margins are also expected to improve in the second half of 2017, leading the company to raise net income forecasts from 13–15 percent growth to 26–28 percent growth.

Adidas also announced the sale of its hockey equipment manufacturing line CCM, to Birch Hill Equity Partners for $110 million.

"CCM and its employees have made great contributions to our company. We have every confidence that the brand will continue to grow successfully under its new ownership," said Kasper Rorsted, CEO of Adidas AG. "The divestiture of CCM further reflects the commitment to our 'Creating the New' strategy, with complete focus on building on our strength in footwear and apparel via our adidas and Reebok brands."

The move is a part of an overall trend seen in the major athletic companies, which are increasingly moving away from sporting equipment given the segments rapid decline in favor of an increased focus on apparel and footwear.

Earlier in the year, Adidas previously sold its golf equipment manufacturing line Taylor Made. Nike Inc (NYSE: NKE) also announced it was going to stop making golf equipment in late 2016.

Adidas does still maintain a heavy in presence in the NHL, serving as the official apparel sponsor for the league.

At last check, shares of Adidas were up 4.82 percent at $108.25.

Related Links: Adidas Finally Sells Golf Segment For $425 Million

Posted-In: Earnings News Guidance Asset Sales Sports Movers Media General Best of Benzinga


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